Slowdown Blues: Now Bosch Trims Workforce To Tackle Lingering Auto Sales

Slump in sales of two-wheelers to cars and heavy duty trucks are triggering massive job cuts and even shut-down of manufacturing units for days.

Slowdown Blues: Now Bosch Trims Workforce To Tackle Lingering Auto Sales

The auto sector has been battered by its worst downturn in the past 19 years

Bosch plans to cut "a couple of thousand" jobs in India over the next four years, its India managing director Soumitra Bhattacharya told news agency Bloomberg. The job cuts by Bosch - the Indian unit of the world's largest auto-parts supplier Robert Bosch GmbH - will add to thousands of job cuts in India's auto industry, which is struggling against weak sales and massive production cuts amid economic slowdown. Bosch is part of German engineering and technology company Robert Bosch GmbH.

Here are 10 things to know:

  1. The country's auto sector is going through cyclical and structural changes because of electrification, technological shift and the advent of shared mobility, Mr Bhattacharya said in an interview in Bangalore on December 30.

  2. In India, Bosch expects auto sales to only recover in the next two-three years after plummeting in 2019 because of regulatory changes, threat of electrification, a liquidity crunch and an economic slowdown.

  3. The auto sector, which contributes more than 7 per cent to the country's GDP, has been battered by its worst downturn in the past 19 years. A slump in sales of two-wheelers to cars and heavy duty trucks has triggered massive job cuts and even shut-down of manufacturing units for days.

  4. Some estimates suggest that automakers, parts manufacturers and dealers have laid off about 3.5 lakh workers since April last year.

  5. The industry's woes reflect a broader slowdown that has afflicted sectors across the board. The slowdown can also be partly attributed to the challenges in migrating to stricter emission framework BS-VI from BS-IV, and to the ailing rural sector, say analysts.

  6. Rural India has been a big market for automakers in recent years. It houses 60 per cent of the country's population and accounts for around 30 per cent of the cars sold as farmers make the transition from motorcycles to cars. Plunging farm incomes in recent years have resulted in widespread rural distress.

  7. This is exerting a domino effect on the auto ancillary industry, resulting in massive unemployment in the contractual labour force employed in these units.

  8. According to the Federation of Automobile Dealers Association (FADA), the recession in the automobile sector has resulted in job loss exceeding two lakh people directly and indirectly connected with the sector.

  9. Automobile majors such as Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Hyundai, Toyota and Hero Moto Corp cut their production and resorted to layoffs due to the muted demand scenario.

  10. Japanese motorcycle maker Yamaha Motor and auto components makers including France's Valeo and Subros laid off about 1,700 temporary workers in India after a slump in sales. Subros, which is part-owned by Japan's Denso Corp and Suzuki Motor Corp, gave pink slips to 800 workers.


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