Road to $5 tn economy: Auto sector needs boost says Union Minister

Chennai: The automotive industry should focus on an effective outreach program for mobilising the youth to create a future-ready workforce, said Union Skill Development Minister.

Mahendra Nath Pandey, who is the Skill Development and Entrepreneurship Minister, on Wednesday said the country’s automotive industry contributes 7.5 per cent to the nation’s GDP and its contribution will certainly boost Prime Minister Narendra Modi’s vision of making India a $5 trillion economy in the next five years.

“In order to achieve this, it is essential that we train our workforce on the latest technologies and make them future ready, using best in class infrastructure. I urge automotive industry to focus on an effective outreach programme and mobilise youth in India for skilling, re-skilling and up-skilling programmes in collaboration with Skill India mission,” Pandey said.

Rajan Wadhera, president, Society of Indian Automobile Manufacturers (SIAM), said there needs to be a consolidated effort from industry leaders in providing training to personnel at various levels to boost skilling in the automotive sector.

“At the same time, impetus by the government is of vital importance to build an aspirational automotive skilling ecosystem,” he said at a conclave organised by the Automotive Skills Development Council held at the national capital.

These comments come at a time when industry body Automotive Component Manufacturers Association of India (Acma) said around 10 lakh jobs could be on the line if the prolonged slowdown in the automobile industry continues.

Acma said the auto component industry that employs around 50 lakh people, sought a uniform GST rate of 18 per cent for the entire automobile sector in order to revive the vertical which has now witnessed 10 months of continuous decline in sales.

Terming the situation as ‘unprecedented’, Acma president Ram Venkataramani said vehicle sales in all segments have continued to plummet for the last several months, thus impacting the component segment as well.

‘Considering the fact that the auto component industry grows on the back of the vehicle industry, a current 15-20 per cent cut in vehicle production has led to a crisis-like situation,’ he said.

‘If the trend continues, the layoffs are inevitable and an an estimated 10 lakh people could be laid off,’ he added and confirmed that layoffs have already started since 70 per cent workers in the industry are contract workers. ‘Whenever there is demand slump, there is reduction in workers,’ he said.

The real scenario
The Indian automobile industry is the world’s fourth-largest. It has now, however, embraced a slowdown after a near-decade of high growth. In May, SIAM announced a 17 per cent decline in passenger vehicle sales for April, the lowest in nearly eight years.

According to the data from the association the month of June was not positive for many carmakers. Maruti Suzuki India (MSI) which holds nearly half the market share saw itself selling 15.3 per cent less than it did in the year-ago period.

Country’s biggest car exporter Hyundai Motor India Ltd (HMIL) reported domestic sales of 42,007 units last month as against 45,314 units in June 2018, down 7.3 per cent.

The biggest loser in the month was Tata Motors which reported that its passenger vehicle sales in domestic market during the month dropped by a whopping 27 per cent. Toyota Kirloskar Motor (TKM) and Honda Cars India too faced slowdown.

NT Bureau