Automobile Dealerships See Major Job Cuts: FADA
Around two lakh jobs have been slashed across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tackle the impact of the unprecedented sales slump, according to industry body Federation of Automobile Dealers Association (FADA).
According to FADA, with no immediate signs of recovery, job cuts may continue with more showrooms being shut in the near future and in a statement, sought immediate government intervention such as reduction of GST to provide relief to the auto industry.
“The majority of job cuts have happened in the last three months. It started around May and continued through June and July,” FADA President Ashish Harsharaj Kale told a media outlet.
“Right now most of the cuts which have happened are in front-end sales jobs but if this (slowdown) continues, then even the technical jobs will be affected because if we are selling less then we will also service less, so it is a cycle,” he added.
According to Kale, 2.5 million people were employed directly through around 26,000 automobile showrooms operated by 15,000 dealers, while 2.5 million are indirectly employed in the dealership ecosystem.
Elaborating on reasons for taking the drastic step of cutting jobs, he said in a statement that the ‘margin of error’ in the business in the past few years has really gone down with cost almost doubling in the last three to four years.
According to Society of Indian Automobile Manufacturers (SIAM) figures, vehicle wholesale across all categories declined by 12.35 percent to 60,85,406 units in April-June against 69,42,742 units in same period of last year. As per data based on registrations collated by FADA, automobile retail sales in the April-June period declined by 6 per cent to 51,16,718 units in the first quarter of this fiscal as against 54,42,317 units in the year-ago period.
Passenger vehicles (PV) segment has been the worst hit with sales continuing to decline for almost a year now. In July, market leader Maruti Suzuki reported a 36.3 per cent drop in its domestic PV wholesales, while Hyundai saw a dip of 10 per cent.
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