The last year has been a rough one for the auto industry as it has seen the steepest volume contraction in over a decade in the June quarter. The automotive parts sector has been the hardest hit if one looks at pink slips with more than 8-10 lakh contract staff being laid off in recent months.
While contract employees happen to be the majority in the auto parts sector, the position of regular employees seems dicey as well. Bosch recently closed its factory for five days, something that hasn’t been seen before (as told to some sections of the media by a director of the Automotive Component Manufacturers Association of India).
In the mobile handsets sector, apart from the overwhelming competition from Chinese brands, the incredible growth of e-commerce has hurt it badly. Over 250,000 jobs have been cut in the last two years, with most of those who were laid off being in-store brand promoters. This ties in with the decline of brick and mortar stores who have been negatively impacted by online sales.
Local handset manufacturers such as Micromax and Lava have been pushed out, while a few other brands like Karbonn and Intex are barely surviving as Chinese brands now command 75% of the Indian market.