Indian auto manufacturers axed 350,000 jobs in four months — and there are more to go

• The auto industry has laid off nearly 350,000 working employees in the last four months, according to a Reuters report.
  
• Car and motorcycle makers have axed 15,000 jobs while roughly 100,000 jobs have been lost in the auto parts manufacturing units.
  
• Maruti Suzuki India has shed over 1,000 temporary employees, and is planning to freeze hiring as a cost cutting measure.
• The sector employs nearly 32 million workers across the country.

The auto sector slowdown has cost the sector hundreds of thousands of jobs. The industry has laid off nearly 350,000 employees in the last four months, according to a Reuters report.

Car and motorcycle makers have axed 15,000 jobs, while 100,000 jobs were lost at auto parts manufacturing units.

Added to this, as many as million contract jobs are on the line as well. Overall, the sector employs nearly 32 million workers across the country, both directly or indirectly.

The slowdown impact

For the last nine months, auto sales have been falling and heavy discounting have not pulled customers in. So much so that auto dealerships have been shuttering down, which has resulted in top car manufacturers like Maruti Suzuki, Nissan, Bajaj Auto and Tata Motors cutting production.

The largest auto company Maruti Suzuki alone shed over 1,000 temporary employees, and is planning to freeze hiring. It witnessed a decline of 33.5% in its total sales, including exports for July. In fact, the company has decided to work in a single shift at all its manufacturing plants as a cost cutting measure.

The sector employs a high percentage of contractual workers to match the dynamic nature of demand in the sector. Employers hire contractual staff at the time of growth while nearly 20% jobs are lost during production cuts, explained Vinnie Mehta, director general, ACMA.

"Temporary employees are the first to get impacted and the same has happened in this case too," IANS reported citing industry sources.

Japanese multinational Nissan is also considering laying off 1,710 of these jobs in India. Tata Motors and Mahindra have had factory shutdowns.

This comes in the back of the ongoing job crisis in India. The country’s unemployment rate stood at 7.91% as on June 2019, according to the Centre for Monitoring Indian Economy (CMIE). And particularly in the auto sector, the hiring has dropped by 2.5% in 2018 fiscal.

See also:
Nissan may lay off over 1,700 employees in India as car sales slow down

Auto sector slowdown puts one million contractual jobs at risk

With 32 million jobs at stake in India’s auto sector, the Modi government may ease tax burden on cars