India's Auto Industry Crisis Explained 🚗

The automobile sector is one of the largest employers in the country, employing about 37 million people, directly and indirectly. The prolonged demand slowdown has triggered production as well as job cuts in the sector. According to the latest figures that are available, original equipment manufacturers (OEMs) have removed about 15,000 temporary workers in the past two to three months. A lack of working capital amid tepid demand has led to closure of nearly 300 dealerships across the country. This has led to over two lakh people losing their jobs, according to the Federation of Automobile Dealers Associations (FADA), the apex national body of automobile retail industry engaged in the sale, service and spares of two- and three-wheelers, passenger cars, utility vehicles, commercial vehicles (including buses and trucks) and tractors. Separately, the Automotive Component Manufacturers Association of India (ACMA) warned in July that 10 lakh jobs were at risk and urgent action was needed to bring the industry back on track.