- Maruti Suzuki has not renewed the agreements of 3,000 temporary employees.
- Indian Auto Industry is facing some of the worst times seeing the worst sales drop in the last two decades.
- This year Maruti is planning to boost CNG cars by 50%.
Maruti Suzuki India Ltd Chairman R.C. Bhargava said the firm had not renewed the agreements of 3,000 temporary employees on Tuesday, as the automaker was fighting an increasing inventory in the midst of a slowdown in demand.
Bhargava informed shareholders at the company’s annual general meeting that safety standards and greater taxes have “significantly added” to the price of vehicles, affecting their affordability.
Reuters revealed on Saturday that with India’s car sales decreasing for the ninth consecutive month in July, more car companies are laying off employees and momentarily halting manufacturing to maintain expenses in check.
Maruti Suzuki is not the only one perishing:
The country’s largest carmaker has reported 37 percent domestic passenger vehicle sales from the last year earlier in July. Second-ranked Hyundai Motor India Ltd. recorded a 10 percent drop while total sales fell 16 percent at Mahindra and Mahindra Ltd. At Toyota Motor Corp. and Honda Motor Co., the sales fell 24 percent and 49 percent respectively in July. Sales of five companies which together make up about 85 percent of India’s passenger vehicle market have fallen nearly 31 percent last month from last year.
The business is on track to fulfill the latest emission standards of the country, adding that the business is moving towards the production of compressed natural fuel (CNG) and hybrid vehicles.
This year, Bhargava said, Maruti is planning to boost CNG cars by 50%.
Indian Auto Industry is facing some of the worst times seeing the worst sales drop in the last two decades. The passenger vehicles have faced the worst hit among all the segments.
According to data released by the Society of Indian Automobile Manufacturers (SIAM), in the period of April-June, the vehicle sales across all categories declined by 12.35 percent to 60,85,406 units against 69,42,742 units in the same period last year. On the other hand, the passenger vehicles declined by 18.42 percent to 7,12,620 units compared with 8,73,490 units in the year-ago period, while the domestic car sales reduced by a huge 24.97 percent to 1,39,628 units as against the numbers of 1,83,885 units in June 2018.
Huge Stock Piling Up:
Latest data shows, at the start of June 2019, half a million four-wheeler passenger vehicles are left unsold in company dealerships worth $5 billion (Rs. 35,000 crores).In a similar way, the unsold stock of two-wheelers stands at 3 million units valued at $2.5 billion (Rs. 17,000 crores). According to an estimate, passenger vehicles worth Rs. 52 thousand crores are lying about unsold, signaling bad days of the automobile industry and Indian economy too.
Given the changing trends in the industry, traditional automakers such as Honda, Maruti Suzuki, and other brands need to have a good look at their product strategy to control the market.