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Unemployment in the auto industry increases due to historic 'decline' in vehicle sales

Monday - August 5, 2019 2:32 pm , Category : WTN SPECIAL
Disappointment in auto sector due to the slowdown
Disappointment in auto sector due to the slowdown

The auto industry facing a terrible 'recession' after years

AUG 05 (WTN) - The automobile sector is currently going through in its worst phase in India, the world's 7th largest economy. After the historic decline in the sale of vehicles, thousands of people are now becoming unemployed in this sector. For your information, let you know that about 2 lakh people have been fired from the auto industry in the last three months only. It is being feared that if there is no increase in the sale of vehicles, then in the coming days there will be a huge increase in unemployment in the auto sector and related industries at the same time.

For your information, let you know that the period of layoff of auto sector jobs started in the month of May, which also continued in the months of June and July. So far, most of the job cuts from the auto sector have been from the sales sector. But it is being said that if the period of decline in vehicle sales continues, then a large number of people from the auto sector as well as other fields related to the auto sector may become unemployed in the coming days.

There are 26,000 automobile showrooms in the country of about 15,000 dealers at present, through which about 25 lakh people are directly employed. At the same time 25 lakh people are indirectly connected with these showrooms. That is, it can be said that only about 50 lakh people have got employment in the country from the automobile showroom present in the country. But the decline in vehicle sales is gradually closing many automobile showrooms in the country. In the last financial year, 286 showrooms from 271 cities of the country were closed for some reason, due to which around 32,000 people had lost their jobs.

According to data, the sales of vehicles in all segments declined by 12.35 per cent in the April to June quarter of this year, and during this time only 60,85,406 vehicles were sold. In the same period a year ago, 69,42,742 vehicles were sold. Talking of cars, the sales of cars in the month of July have dropped by almost 30 per cent. According to the data, passenger vehicle sales have seen a decline of 18.4 per cent in the June 2019 quarter. Commercial vehicle segments also saw a decline of 16.6 per cent.

During this period, two-wheeler sales have seen a decline of 11.7 per cent. The fall in vehicle sales is such that the June 2019 quarter has proved to be the worst quarter in 18 years for the auto industry. Apart from cars and two-wheelers, there has also been a significant decline in sales of tractors related to farming.

There are several reasons for the decline in vehicle sales. According to experts associated with the auto industry; there is a decrease in the sales of vehicles due to slowdown in the economy, the problem of getting loan, no increase in demand in rural areas, and increased interest of people in purchasing old vehicles. Apart from this, people are not buying vehicles due to the expectation of a reduction in the GST rate, and a reduction in the price of vehicles after moving from BS-IV to BS-VI standard next year.

In fact, one of the reasons for the decline in vehicle sales is the significant stagnation that comes after long-term vehicle sales. It is the principle of economics that after a continuous sale of a commodity, it is seen to decline in the sale after a time, because that item is now available to most people. Experts, who keep a close eye on the auto sector, believe that the sales of vehicles will pick up again after a long halt, but by then many people will have become unemployed, but once again when the sale of vehicles gets faster, the employment chances in the auto sector will again increase.