The Indian auto industry is witnessing massive layoffs, as the industry is witnessing a constant dip in the auto sector in the current financial year.
After country's largest automaker Maruti Suzuki laid off 3,000 temporary workers earlier this week, Mahindra & Mahindra (M&M) has laid off 1,500 workers since April 1, 2019. "It is just the beginning. If the situation doesn't improve, we will be forced to lay off more people. But none of the people we have laid off is a permanent employee," a source within the company confirmed to DH.
Earlier, another business-daily, Business Standard quoted the company's CEO Pawan Goenka stating the same thing during the inauguration of its first plant in Colombo.
Automobile sales in India witnessed its sharpest decline in nearly 19 years in July, dropping 18.71%, rendering almost 15,000 workers jobless over the past two-three months as the sector reels under a prolonged slump, auto industry body SIAM reported earlier this month.
The auto sector has been adversely impacted due to the shadow banking crisis in the country. The non-banking financial corporations used to the primary source of loans for the car-loan borrowers before IL&FS fiasco sucked the liquidity out of the system. The industry insiders also blame the high tax rates on the cars contributing to the problem.
The auto industry has been increasingly been demanding stimulus, along with the reduction in the tax rates.