Indian auto sector crises getting worse

Likewise, Pakistan, Indian auto sector crises is now getting worse day by day. Overall sales are down 20 % which is the lowest in the last two decades. 3.5 lakh jobs have already been lost. Government has taken a number of measures to support the falling auto industry but despite these efforts one million jobs are still at risk. 286 car showrooms including major Dealerships including Maruti Suzuki, Hyundai, Honda, Ford, and many others have been closed through India since the crises began.

A number of units that used to make ancillary parts for the auto sector have either shut down or working at half capacity. The crises are named mini Detroit on the outskirts of Delhi, Gurgaon, and Manisa. Thousands of cars have been manufactured but remain unsold standing in big parking lords. This is almost similar situation Pakistani Auto Manufacturing companies going through these days.

Not only that Indian auto sector crises have slow down the manufacturing process of Maruti Suzuki due to the reason a big number of people have become jobless. It doesn’t stop here, some of the manufacturers are going to announce compulsory retirement for their permanent employees at the age of 40. Even Endurance a company which produces aluminum die casts to major assemblers have also been closed from last eight months which shows the overall condition of the auto industry.

Another company named Omax Autos which supplies vehicle frames have also been shut down since May 2018 due to strike of the workers union. A plant which is known for making safety equipment and is a global supplier namely Wabco has also been partially shut down. Moreover, many manufacturers have decreased the number of working days per week similarly to Pakistani Auto Manufactures.

Indian auto sector crises – Factors behind

There are several reasons behind the crises like Increase in Registration Fee and not forming policies regarding scrap old vehicles due to which people are not buying new vehicles. Increase in oil prices. Moreover, the Indian Government has declined the demand of Auto Manufacturers to cut the GST from 28% to 18 %. Last but not least the biggest reason is the overall decline in India’s GDP up to 6% in the current quarter of 2019.

One of the major factors responsible for the overall slowdown in auto production including Pakistan is the uncertain condition of the world’s economy due to the US-China trade war and Brexit concerns.