How The Slump In India's Automobile Sector Affecting Jobs And Incomes

The slump in India’s automobile sector is taking a toll on allied industries, affecting jobs and incomes.

- Radhika K.T.P.

For the past 26 years, K. Munisamy, 50, has been following a routine. Every morning, in a blue shirt and trousers, he starts work at one of the milling units of an auto parts maker in Chennai. He clocks in eight hours before going home. “During good times, I used to work overtime and earn more,” says the father of two, who supports a six-member family, which includes his parents. “I used to earn enough (22,000 a month) to meet the expenses, but that will change,” he says. His colleague, Kumar, 35, is in a similar situation. “My children are in school and my wife doesn’t have a job. I am the only earning member in my family (he earns about 17,000 a month) and I have to search for a job now,” he says. “This is a bolt from the blue.”

Kumar and Munisamy are early casualties of the ongoing slump in India’s automobile sector. Their employer, a valve maker in Chennai’s Ambattur Industrial Estate, has given notice to its employees as it is shutting operations a couple of months down the line.

India’s auto industry is witnessing one of the worst rides in its history. They are staring at an unsold inventory of 500,000 passenger vehicles and 3 million two-wheelers. India’s top 10 auto companies have slowed production. According to industry body SIAM, vehicle sales across all categories declined 12.35 per cent in the April-June period. Passenger vehicle sales fell 18 per cent and car sales declined 25 per cent in June alone. The industry is going through a prolonged slowdown, the worst in nearly two decades, says SIAM President Rajan Wadhera.