Maruti Suzuki Cuts Over 3,000 Temporary Jobs Due to Slowdown

A top executive said that upcoming festival season and linking GST benefits to eco-friendly cars will boost sales.

Over 3000 temporary employees have lost their jobs at Maruti Suzuki.

(Photo: The Quint)

Over 3,000 temporary employees have lost their jobs with the India’s largest carmaker Maruti Suzuki India (MSI) due to the ongoing slump in the automobile industry, a top executive said on Friday, 16 August.

MSI chairman RC Bhargava said that contracts of temporary workers were not renewed due to the slowdown. However, he added that permanent employees had not been impacted.

“This is a part of the business, when demand soars, more contract workers are hired and reduced in case of low demand,” he said, addressing media persons who questioned him about the slump in the automobile industry.

Bhargava said that since the automobile sector created jobs across sectors, any slowdown of automobile sales would invariably hit jobs on a larger scale.

Reiterating that automobile sector creates job in the economy from sales, service, insurance, licensing, financing, accessories, drivers, petrol pumps, transportation, he cautioned: "Fewer automobiles (sales) will impact jobs on a larger scale. These are not even visualised. The impact is much higher."

When asked if the industry had hit the rock bottom sales-wise in July, he said revival in the sense of positive growth can be expected from the third or fourth quarter of this fiscal year, partly because of the lower base effect.

"Hopeful to see strong revival in FY 2021. By then transition to BS VI will be over," he added.

Festival Time, Linking GST Benefits to Green Cars Can Revive Sector

Bhargava said that the good monsoon coinciding with the upcoming festival season could help improve sales, particularly in rural areas.

"If the government makes an announcement and takes positive actions it should help improve the situation," he said, adding that it was the government’s decision to decide on GST rate cuts and take corrective action.

"Personally we would like to see GST benefits linked to greener/cleaner cars. The government gave tax cut on electric vehicles (EV) but hybrid should be given duty cut. There should be tax cut on CNG vehicles," he added.

(With inputs from PTI)