The prolonged slowdown in the Indian auto market has distressed the industry to the extent that lakhs of jobs are at risk. The deterioration has been concerning automakers and the industry body- SIAM (Society of Indian Automobile Manufacturers) has been demanding support from the government for quite some time now. In a bid to avoid any further risk, Rajan Wadhera, President- SIAM and head of Automotive Division at Mahindra has asked the government to immediately reduce the GST rates on passenger vehicles and charge them under the 18 per cent bracket instead of 28 per cent at which they are currently charged.
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"Need for an immediate reduction in GST rates has been agreed unanimously amongst all members of the Automobile Manufacturers including the two wheeler OEMs. This was also reiterated at a recent meeting with the Finance Minister where all OEMs representing passenger vehicles, commercial vehicles and two wheelers had actively participated, SIAM said in a statement. Pawan Munjal, Chairman of Hero MotoCorp the largest manufacturer of two wheelers in India, has also emphasised on this point on immediate GST reduction at the meeting with the Finance Minister.
As said, job losses across the sector is the biggest threat of the downturn. India's largest carmaker- Maruti Suzuki has already laid off 6 per cent of its workforce while Nissan India recently let go 1,710 of its employees. Ram Venkataramani, President- ACMA also had said in its annual conference last month that if the slowdown continues, an estimated one-million people could be laid off from the entire industry. Pawan Goenka, Managing Director- Mahindra & Mahindra during the company's Q1 financial results told reporters that he sees an impending danger of job losses across the ailing auto sector.