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About 1 lakh lost jobs in auto sector due to slowdown

Last Updated : 06 December 2019, 13:45 IST

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Slowdown in automobile sector hit auto component industry severely as around 1 lakh temporary workers lost jobs till July this year, claimed auto component industry on Friday.

The turnover of the auto component industry dropped to Rs 1. 79 lakh crore in April-September period this year down by 10.1 % from Rs 1.99 lakh crore in the similar period last year, said Automotive Component Manufacturers Association (ACMA), said here.

"The automotive industry is facing a prolonged slowdown. The vehicles sales in all segments have continued to plummet for the last one year," ACMA President Deepak Jain, told reporters here.

Workers retrenchment has taken place from October last year till July 2019, he claimed.

Subdued vehicle demand, lack of clarity on policy for electrification of vehicles among others have also had an adverse impact on the expansion plans of the component sector, he said.

During April-September this year, exports registered a marginal growth of 2.7 % to Rs 51,397 crore during the period, while the aftermarket segment grew by 4 % to Rs 35,096 crore. Import of components declined by 6.7% to Rs 57,574 crore, Vinnie Mehta, Director General, ACMA said.

Seeking government help for the growth of the auto component industry, Jain said one of the main demand of the industry is a uniform 18 % GST across the auto components.

"At present, 60 % auto components are taxed at 18 % while remaining 40% at 28%. This has led to flourishing of grey operations in the aftermarket," he said.

A uniform 18 per cent rate will ensure better compliance and larger tax base, Jain added.

He also urged the government to revise in the definition of MSME, from one based on investment in plant and machinery to that on turnover.

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Published 06 December 2019, 13:45 IST

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