[volkman10]

Slowdown in industries now in danger - Unemployment to rise,

It is the first time, now Maruti Suzuki cuts temporary workforce as sales sink with no relief seen in the near future.

Maruti Suzuki had employed 18,845 temporary workers on average in the six months ended June 30, down 6% or 1,181 from the same period last year. The company also said job cuts had accelerated since April.

The company would freeze hiring new employees until the downturn reversed

India's jobless rate rose to 7.51% in July 2019 from 5.66% a year earlier. Those figures do not include many people on the margins of society who are day labourers and are often unemployed or underemployed

Link

[fazayal]

Originally Posted by sri_tesla

Many people seems to be attributing the downturn in sales are due to GST, BSIV or EV support, etc... but the situation is same across the world. Downturn in India started a bit late compared to markets like China.

China:
For the first time in 2 decades, China automobile sales declined in 2018 and continuing in 2019. China recorded 12 months continuous sales decline till June 2019 (July numbers are not revealed yet) and these declines are in double digits. Due to drastic downturn, there were huge discounts up to 50% in June to clear the inventory.

Europe:
Europe sales are flat in 2018 compared to 2017 but posted huge declines in almost all months in H1, 2019. Some charts below for EU.

EU H1 2019:
Attachment 1901546

EU June 2019:
Attachment 1901547

Here is an FT article content posted on reddit about German industry situation:
https://www.reddit.com/r/Economics/c...nys_prospects/

There is a slowdown in China in automobile sales but not at the same level as India. In India sales are down nearly 20% in first four months of this FY compared to last year. For China it is around 10%.

USA is not affected.

Europe is showing negative or flat sales for a long time now. Nothing new in it.

Slowdown in automobile industry in India is not due to global factors.

[volkman10]

Originally Posted by volkman10

India slips to 7th largest economy in 2018: World Bank

The mighty fall:

[avishar]

'Might fall' is as over-dramatic as it comes. It's more down to dollar pound exchange rates than any noticeable growth in UK or France.

[coldice4u]

Originally Posted by volkman10

The mighty fall:

Attachment 1901939

Its not a "fall" per se as the numbers have only increased for India. UK and France increased their numbers and hence the decrease in rankings, but this is all semantic. Its just a matter of time before India claws back in the rankings.

What should be of more importance is the fact that in the 3 years, China increased its GDP by a number equivalent to the entire Indian GDP ! Mindboggling and goes to show how big the dragon really is !

I know this is so off topic to the thread title

[Abby92]

Originally Posted by BoneCollector

We've a 7 year old Wagon R which is doing duties fine as of now, we may look for a replacement some time next year or so if required. Brezza is 3 years old and we intend to keep it for atleast next 3-4 years so that picture is clearer what we can go for - electric/hybrid or something else. Brother has a 10 month old S-Cross so no question of changing it any time soon. Sister-in-law has a City which is due for replacement and we are actually looking forward to it.

Now extrapolate this to thousands of people if not lacs, especially salaried middle class tax-payers who would be having a fairly new car or an old one doing good job and there is no need for replacing immediately. That means that lesser people would be going in for a new car amongst the earlier owners. And new car owners would be mainly first time buyers. In this case, isn't the market kind of saturated and coming down the plateau phase? Or am I missing something?

Exactly. Moreover majority of first time car buyers might still prefer a entry level segment A hatch if there were any quality VFM updated products. Instead a prospective buyer is forced to look a segment higher and all the reasons pointed out by fellow bhpians eventually leads the buyer to a dilemma because of higher stakes involved. I am sure if the manufacturers were to focus on a revolutionary affordable product, things might turn in their favour.

[truezealous]

Among the other reasons, the biggest single factor in an auto sales collapse is seems to be deepening liquidity crunch among India's Non-banking finance companies (NBFCs), or shadow banks.
In India, NBFCs have in recent years helped fund nearly 55-60% of commercial vehicles both new and used, 30% of passenger cars and nearly 65% of the two-wheelers in the country, according to rating agency ICRA.
IL&FS, or Infrastructure Leasing & Financial Services Ltd, was a behemoth in shadow banking and its defaults and unravelling, amid fraud allegations, have dried up funding for rivals and led to a surge in their borrowing costs.
While 70-75% of car sales were previously financed in-house by NBFC or bank agents sitting at a dealership, that has fallen to about 50%, say dealers, as buyers struggle to qualify under more stringent lending norms put in place by lenders that are under pressure to shore up their books.
Moreover, as many NBFCs typically lent to less creditworthy clients, banks are reticent to rush in to fill the void, as they themselves struggle to cope with an existing pile of about $150 billion in bad loans.

source.

[volkman10]

Two lakh jobs cut in last 3 months across automobile dealerships, more cuts in the offing as production cuts is being mulled among most auto makers.

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

The two lakh jobs cuts in the last three months are over and above the 32,000 people who lost employment when 286 showrooms were closed across 271 cities in the 18-month period ended April this year

Industry insiders point out that slowdown, which is a culmination of high GST tax rates, farm distress, stagnant wages and liquidity constraints, has led to the month-on-month sales de-growth.

Besides, inventory pile-up at dealership level and stock management of the unsold BS IV vehicles has become a problem for the sector.

Link

[arbaz906]

Titled The Crash of 2019 - a very long & interesting read. Highlights numerous issues plaguing the auto industry which includes tougher financing (for both companies & consumers) and the overall decrease in purchasing power of the masses.
BTW our regime is busy maintaining the "ignorance is bliss" mindset, like it does for every other serious issue that is affecting our country.

https://www.indiatoday.in/magazine/c...008-2019-08-02

[Karthik Chandra]

Industry is bleeding. Huge dip in volumes. MS looses a huge chunk. Hyundai and Mahindra manage to minimize loss and gain market share.

189593 in July'19 vs 285735 in July'18, deficit of 96142 units over 2018

[Mortis]

There are numerous external factors that have led to the decline of the auto industry from financial issues, lack of infrastructure and overcrowding of cities due to out of control population growth, availability of private players in public transport, etc.

Now if we come to the cars themselves at the core, it's quite easy to see that the greed of car manufacturers has quite a role to play. For one car prices have increased quite sharply over the last decade or so for what they offer. Secondly the feature distribution in a particular models variants has become very badly skewed. The mid model now which is supposed to be bang for buck just doesn't feel so attractive anymore. Manufacturers are pushing the customers towards the more expensive top and top++XX variants on already overpriced cars.

[volkman10]

Gloomy picture for Auto segment to continue, Maruti Suzuki will operate in a single shift only in all its plants. More jobs at risk in addition to the already terminated 1000 temp. employees.

The car-maker that sells one in two cars running on Indian roads might slash one shift even at the Manesar plant, which will now likely join the Gurugram & Gujarat facilities in operating below capacity

The Manesar plant has an annual capacity of 750,000 units, and it makes Ertiga, Wagon-R, Swift, Dzire and Baleno cars.

Production cuts at the maker of Swift and Baleno have meant hundreds of job losses for contractual staff. With all plants likely to move to a single shift, some more jobs are at risk

Link

[indian21r]

2 lakh + job cuts is massive. This is not the end too.

The slowdown this time will be really hard on the people. In the past people had savings which could alleviate the immediate suffering.

But the current scenario where we run our lives on EMI/ by the pay check is going to hit people hard. What will people whose skills are not transferable across the industries do?

The impact of Manufacturing slowdown will surely be felt soon across other sectors in the manufacturing hubs. I remember reading that Automakers and ancillaries contribute a major chunk (close to 50%) to manufacturing in India.

[AWD]

These auto manufacturers were looting consumers through super expensive repairs & service, not to mention the initial cost of acquiring the vehicles. I hope a better & more frugal Industry rises up from the debris of loot, which provides cheaper costs of ownership, are more consumer friendly setups.
Showrooms & service agencies had become so rude & were taking consumers for granted. I already see them normalising from the interactions with consumers post slowdown. So this one is a great leveller.

[volkman10]

Massive job cuts as the auto industry face challenges.

- Parts manufacturers and dealers have laid off about 350,000 workers since April.

- Car and motorcycle makers have laid off 15,000 and component manufacturers 100,000, with the remaining job losses at dealers, many of which have closed.

- Five companies that have recently cut or plan to cut hundreds of jobs, mainly from their temporary labour force.

- Yamaha Motor and auto components makers including France's Valeo and Subros have laid off about 1,700 temporary workers

-Subros, which is part-owned by Japan's DensoNSE 0.32 % Corp and Suzuki Motor Corp, has laid off 800 workers. Indian parts maker Vee Gee Kaushiko has cut 500 people while Yamaha and Valeo last month reduced their workforces by 200 each


-Wheels India could cut its temporary workforce by as much as 800 and has started realigning its shifts


-Maruti Suzuki, India's biggest carmaker, cut its temporary workforce by 6% over the past six months

- Tata Motors said it has aligned production with demand and adjusted the shifts and temporary workers.

-Honda has stopped production of some car models at its plant in the northwestern state of Rajasthan since July 16 and is halting manufacturing entirely at its second plant in Greater Noida on the outskirts of Delhi for 15 days from July 26,

There is little sign of a revival.

Link