The increasing problem in India is the slow employment growth rate and also a steady increase in fuel prices. Due to these two factors, our country’s automobile industry is badly affected.
The automobile industry ran through a massive dip in sales as automobile makers have been forced to temporarily close their production plants for many days and give forced leaves to its employees.
As per the Economic Times report, more than half a million passenger vehicles estimated at $5 billion (nearly Rs 35,000 crore) are lying with the dealerships that have not yet been sold yet in the first week of June month itself.
The two-wheeler category has also faced the same issue as the vehicles worth $2.5 billion are simply lying with the dealerships.
“Sales in the passenger vehicle market have dropped in each of the seven months through May, as slowing job growth along with rising fuel prices and a liquidity crisis in the non-banking financial companies affected consumer sentiment,” read the report.
Big automobile companies like Tata Motors, Mahindra and Maruti Suzuki announced their plant shut down schedules between May and June.
The Economic Times report also adds that the production stoppings by several automobile manufacturers are said to minimise the combined output by 20-25 per cent in the May-June period and car manufacturers like Honda Cars India, Renault-Nissan and Skoda have announced the different days of shutdown.
