New Delhi: Industry body ACMA on Wednesday said around 10 lakh jobs could be on the line if the prolonged slowdown in the automobile industry continues, while seeking immediate government intervention such as slashing GST to stimulate demand.
The Automotive Component Manufacturers Association of India (ACMA), which represents the auto component industry that alone employs around 50 lakh people, sought a uniform GST of 18 per cent for the entire automobile sector in order to revive the vertical which has now witnessed 10 months of continuous decline in sales.
Terming the situation as "unprecedented", ACMA President Ram Venkataramani said vehicle sales in all segments have continued to plummet for the last several months thus impacting the component segment as well.
"Considering the fact that the auto component industry grows on the back of the vehicle industry, a current 15-20 per cent cut in vehicle production has led to a crisis-like situation," he said, adding "if the trend continues, the layoffs are inevitable and an an estimated 10 lakh people could be laid off".
When asked if layoffs have started, Venkataramani replied in the affirmative. "In the components industry, nearly 70 per cent of the workforce is contract workers. So, whenever there is demand slump, there is reduction in workers," he said.
Subdued demand, recent investments made for transition from BS IV to BS VI emission norms, lack of clarity on electric vehicle (EV) policy has left the industry unsure of its future and has caused it to stop all future investments, he added.
