The Indian automobile sector’s downward spiral continues as car sales recorded a decline for the seventh consecutive month in May 2013. The slump is so sharp that the sector could witness huge job losses in the near future.
Reports suggest that the first to be affected would be contract and temporary workers which could be followed by OEMs. There is no specific information on job losses as of but it could soon be the case across the industry.
“So far we have not received any specific information of people being laid off but the situation is such that it may have started or will start soon,” Vishnu Mathur, Director-General, Society of Indian Automobile Manufacturers, said.
According to data released by auto trade forum SIAM, passenger cars declined by 11.33% . Despite the slack, car companies are being forced to increase prices, adding to the gloom in the sector. Japanese carmaker Honda increased the price of their newly launched Amaze as well as their CRV on account of rupee fluctuations. Others are expected to follow suit.
Total production dipped 4.08% with 17,37,548 units produced in May 2013 as against 18,11,515 units in May 2012.
“This is the longest stretch of consecutive decline in car sales we have witnessed. Even in the 2008-09 downturn there were no such prolonged period of fall. These are worrying times for the automobile industry,” Mathur said.