After announcing five non-working days in its Ennore, Chennai plant, truck manufacturer Ashok Leyland has announced a list of non-working days (total 59) across its plants in September. In a regulatory filing, Ashok Leyland said that the non-working days at its various plants are due to continuous weak demand for its products.
The company’s Ennore plant will be shut for 16 days. In Tamil Nadu, its plant in Hosur 1, 2 and CPPS will not work for 5 days, while the one in Alwar (Rajasthan) and Bhandara (Maharashtra) will see 10 non-working days each. Its Patnagar (Uttarakhand) plant will see the most – 18 -- non-working days.
This comes after the company’s employees in the Ennore plant received a letter that September 6 and 7 would remain a holiday and September 8, 10 and 11 will also see no operations at the plant.
The five days of non-production in the plant is expected to affect 5,000 workers, including 3,000 contract workers, according to reports. Wages for these non-working days will be decided later by the Ashok Leyland Employment Union.
However, it is not yet known how the non-production across the various plants will affect workers.
The auto industry has been facing its worst slump in nearly two decades with over 3.5 lakh people losing their jobs as auto makers and component makers shut down production plants, either temporarily or permanently.
Industry degrowth
For the past nine months, sales have been continuously falling. According to data from Society of Indian Auto Manufacturers (SIAM), the industry produced a total 12,020,944 vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycle in April-August 2019 as against 13,699,848 in April-August 2018.
This is a de-growth of 12.25% over the same period last year.
The sale of Passenger Vehicles declined by 23.54% in April-August 2019 over the same period last year. The overall commercial vehicles segment fell by 19% in the same period, compared to last year.
Three Wheelers sales declined by 7.32%, while two Wheelers sales registered a de-growth of 14.85%.
The industry has been asking the government to consider a cut in GST for the sector in a bid to revive auto sales.
Speaking at the annual convention of SIAM, Tata Motors CEO and MD Guenter Butschek said that the Indian automotive growth story is about to collapse due to various factors including low economic activity, subdued demand, liquidity constraints. He added that government needs to help the industry by lowering GST before September 20.