Auto parts industry of India is in the middle of one of its worst slumps and could be forced to slash a fifth of its 5 million or so workforce if the slowdown in vehicle sales continues, vehicle sales fell 18.4% in the first quarter, and monthly passenger vehicle sales in June fell by the biggest margin in 18 years, the president of the country’s largest industry group for auto parts makers said.
The crisis has led car manufacturers to cut production, and car manufacturers and spare parts maker to cut jobs.
President of the Automotive Component Manufacturers Association of India (ACMA)Ram Venkataramani, said in a statement late on Wednesday that “The drop in production has led to a crisis like situation in the auto component sector, If the trend continues, an estimated 1 million people could be laid-off.”
Venkataramani said investments in the auto sector had been frozen due to the government’s lack of clarity on its policy on electric vehicles. He said a government plan to accelerate the deployment of electric vehicles would increase India’s import bill and damage the prospects of auto parts manufacturers.
Venkataramani also called for a reduction of the goods and services tax for the automotive and components sector.
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27 September, 2019