There seems to be no respite for the Indian economy as GDP growth tumbled to 5% in Q1FY20, its lowest point since 2012. If the economy does not revive, consumer sentiment is expected to remain subdued, further weakening the economy. The one sector that has been hit hard is auto.
Slowdown blues have gripped the industry that was just coming to terms with regulatory changes, such as BS-VI norms and government’s push for electric vehicles. Yes, certain palliative measures, including lifting the ban on buying of vehicles by government departments, have been taken but these will take time to whip up sales. August auto sales were not encouraging to say the least and dealers, too, have been sucked into the slow lane. Out of the nearly 300 dealers that have shut shop, around 250 are those who trade in passenger vehicles. This and automakers halting production have put thousands of jobs at risk. One of the largest employers in the country, the sector has let go of 350,000 people since April, according to reports. While all players are pinning their hopes on festive sales, more pink slips and closed shutters are likely over the next few months.