fbpx

Maruti Suzuki sheds around 3,000 jobs as slowdown bites

Maruti Suzuki India Ltd said on Tuesday that it has not renewed the job contracts of around 3,000 temporary workers in recent months amid a sharp slowdown in sales, though permanent workers have remained untouched by the manpower restructuring exercise.

R.C. Bhargava, chairman of India’s largest carmaker, is hopeful automobile demand will rebound following a series of steps announced by the government.

Contractual workers give flexibility to the operations of the company, Bhargava said at Maruti’s annual general meeting.

India’s automotive sector is in the midst of an unprecedented slowdown, with passenger vehicle sales falling the most in nearly 19 years in July. This underscores weak consumer sentiment, uncertain economic conditions, higher ownership costs, farm distress and a credit squeeze. This was the ninth straight drop in passenger vehicle sales.

Sales of commercial vehicles as well as two-wheelers have also remained weak, forcing automakers across segments to lay off workers and temporarily suspend production to keep costs in check.

Bhargava said Maruti has no plan to fire any of its 16,050 strong permanent workforce in the near future. He said steps announced by finance minister Nirmala Sitharaman on Friday to boost the economy will go a long way in reviving demand in the domestic market.

“Some of the measures announced by the government are very good and faster availability of GST (goods and services tax) refunds will fuel further growth. Also, the assurance from government that bankers will not attract punitive measures for bona fide commercial decisions will help,” Bhargava said in response to a shareholder’s query.

Last week, Sitharaman announced a slew of steps such as mandating government agencies and departments to replace older vehicles, increasing depreciation on new vehicles for commercial fleet service providers, urging banks to make automobile loans cheaper and increase credit availability for non-banking financial companies.

error: Content is protected !!
%d bloggers like this: