New Delhi: Maruti Suzuki India Ltd Chairman RC Bhargava said Tuesday the company had not renewed the contracts of 3,000 temporary employees as the automaker battled rising inventory amid a slowdown in demand.
Safety norms and higher taxes have “added substantially” to the cost of cars, affecting their affordability, Bhargava told shareholders at the company’s annual general meeting. With India’s auto sales declining for the ninth straight month in July, more automotive manufacturers are laying off workers and temporarily halting production to keep costs in check, Reuters had said Saturday.
The company is on track to meet the country’s new emission norms, adding that the company will move towards manufacturing compressed natural gas (CNG) and hybrid cars. Maruti plans to increase CNG vehicles by 50 per cent this year, Bhargava said.
The automobile industry is facing a crisis, with 15,000 jobs having been cut in the sector in the last quarter and almost 300 dealerships having been closed down in the last 18 months. The decline in consumer confidence, coupled with the crisis in Non-Banking Finance Companies, have caused a steep fall in passenger car sales.
With BS-VI emission norms coming into effect soon, prices of vehicles have also gone up since car manufacturers have to upgrade their products to meet the new norms. Manufacturers of two-wheelers are also looking at a compulsory upgrade of three-wheelers to battery-powered vehicles by 2023. Two-wheelers have to complete the upgrade by 2025. This will cause prices to shoot up.
