Ten lakh jobs at risk in the Indian auto components industry

Continuous drop in sales in the automobile sector has adversely affected the components industry as well, which currently employs approx. 50 lakh people in the country.


The Indian automobile industry has been witnessing plummeting sales for almost a year now. This has affected the business in the automobile components industry too, which currently employs 50 lakh people. If the sales continue to drop, there will be no other option but to lay off at least 10 lakh people.

The Automotive Component Manufacturers Association (ACMA), which works to protect the interests of the Indian auto component industry, recently revealed that the slowdown in the automobile industry has adversely affected the components segment too. The body has sought government intervention to reduce the goods and services tax so that demand goes up. It wants a uniform GST of 18 per cent for the entire automobile sector so that business can be revived.

Since the auto component segment thrives off the automobile industry, the drop in vehicles sales and production has actually resulted in a crisis. If sales do not pick up, at least 10 lakh workers will have to be laid off.

It is not only those under direct employment of the industry that will be affected. Even workers employed by small-scale dealers, workshop owners, mechanics and others associated with the industry will have no work.

A majority of the workers in the components industry, almost 70 per cent, are hired on contract. So, the moment there is a drop in profits, the number of contract workers is reduced.

The effect of the crisis is already visible, with Maruti reducing the number of working days from seven to five/six to cut costs. Nissan intends to lay off 1,700 workers.

The promotion of electric vehicles and the rising prices of petrol and diesel are only adding to the woes.

NITI Aayog has proposed transition to electric vehicles (EVs) for three-wheelers by 2023 and two-wheelers by 2025. The future looks quite bleak for the auto components sector.

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