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At a time when the auto industry is slashing production and has laid of nearly 3.5 lakh temporary jobs, the MD of Bajaj Auto, Rajiv Bajaj, has said that the industry is responsible for most of the slowdown.
“How are we going to build a sense of ownership in our own people if we can’t even cushion a shock for 6-12 months and that too a shock of our own making”, he told CNBC-TV18 interview.
“Salaries for Bajaj Auto employees are just four percent of sales. Getting rid of 10 percent of my people would save only 0.4 percent. Is saving 0.4 percent in EBITDA and playing to the galleries on Dalal Street more important than thousands of jobs?” he said, in an interview to CNBC-TV18.
Bajaj added that a five to seven percent drop in retail sales is not to be viewed as a crisis and that the industry needs to look at its weaknesses and shortcomings before asking the government for a stimulus.
According to him, the drop in retail sales would have hurt less if companies had invested in global markets in the last 10-15 years. He also said that companies had been unable to export their products because they were mediocre, mainly because they tried to make everything.
According to Bajaj, the auto industry was now correcting stocks after having built up an inventory in September 2018. Bajaj Auto too will be focussing on inventory correction and would not push up wholesale numbers this festive season, he said.
Acknowledging that it is a difficult time for the sector, Bajaj said that the government should not make it worse by raising registration fees.
(With inputs from CNBC-TV18.)
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