Amid auto slump, components sector sees 8-10 lakh job cuts
Contract workforce endure brunt of crimson slips
The decline in growth in the auto industry over the previous eleven months has affected the components industry as well. It has resulted in the laying off of 8-10 lakh contract employees in recent months in the auto components sector.
According to a senior legitimate at the Automotive Component Manufacturers Association of India (ACMA), the job losses are taking place mostly because of the slowdown in the auto enterprise and in the most important hubs inclusive of the Gurugram-Manesar belt of Haryana, Pune, Jamshedpur (Jharkhand) and some components of Pithampur (Madhya Pradesh).
Without giving details about the principal businesses that are cutting jobs, ACMA Director General Vinnie Mehta informed BusinessLine: “The job cuts are taking place round the hubs and through at least 10-15 per cent in every of the companies. The entire Haryana belt is suffering. There are round 50 lakh workers in the auto components enterprise and around 70 per cent of them are on contract.”
He said the losses are a ‘trickle-down’ influence of the slowdown in the auto industry, mainly passenger and business automobiles makers, and if this continues, more lay-offs are expected. The two-wheeler sector is doing nice now, however one can’t be certain for how long, he added.
Though contract personnel are greater in numbers, there is some predicament on the ordinary ones, too, as there is not lots work in the factories due to negative demand from original gear manufacturers, Mehta said.
For instance, leading auto parts maker Bosch had to close its manufacturing facility for five days recently, which is some thing unheard of earlier, he added.
ACMA is reducing this year’s turnover forecast to greater single-digit growth. The components enterprise had recorded a turnover of ₹3.95-lakh crore in FY19, up 14.5 per cent from the previous fiscal’s ₹3.45-lakh crore.
“The enterprise desires urgent authorities intervention. There is an on the spot want to stimulate automobile demand and also sustain it publish BS-VI implementation, as cars will emerge as substantially steeply-priced thereafter,” said Ram Venkataramani, President, ACMA