Boom to bust: Gloom grips India's auto industry amid unprecedented slump

At least 60 per cent of contract workers at auto plants in Chennai have lost their jobs in the past few months, according to two labour suppliers. The pain is spreading to other parts of the economy.

Published: 11th September 2019 05:51 PM  |   Last Updated: 11th September 2019 07:25 PM   |  A+A-

Cars, Automobile, vehicles, manufacturing, auto sector

Image for representational purpose only. ( Photo | Debadatta Mallick, EPS)

By Bloomberg

It’s hard to escape the influence of the auto industry in Chennai, a city in southern India known as the nation’s Detroit. Schoolyards have billboards proclaiming they’re “supported by” big carmakers such as Daimler, Renault, and Nissan Motor. Even the public toilets in a nearby slum are sponsored by the country’s largest tiremaker.

With a rising middle class and rapid urbanization, this should be boom times for the country’s automotive industry, the fourth-largest in the world. Car density—measured by the number of passenger cars per 1,000 people—was only 27 last year, vs. 145 in China and 570 in Germany, according to Fitch Ratings. That leaves huge potential for growth. McKinsey & Co. projected in 2018 that India could overtake Japan as the No. 3 car market by 2021.

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