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650 auto ancillaries hit by slowdown in Nashik

10/09/2019 | Author: Autoguide | 0 Comments Back To Home   < Previous News   |   Next news >

Slowdown in the automobile sector is taking a toll

The slowdown in the automobile sector is taking a toll on roughly 650 auto ancillaries spread across the three industrial estates in the Nashik district. The production in these units has reduced by at least 45 per cent. Moreover, about 6,000 contract workers associated with these units have been laid off.
According to a media report, these units are currently working five days a week, instead of the usual six. And the number of daily shifts too has reduced. At the units, which earlier had three daily shifts, now there are only two. At those that had two shifts, the number has reduced to just one.
Industrialists said they have been forced to take such measures as the demand for components from automobile majors has become sluggish.
These units supply components to companies like Mahindra & Mahindra (M&M) and Bosch Ltd that are based in Nashik. There are around 650 ancillary units that supply spare parts to these two companies. Of which, 450 industries are major vendors, while remaining 200 units are sub-vendors. These units are located in Satpur, Ambad and Sinnar industrial estates
“There has been a severe slowdown in the sector. The large industries have reduced their production due to drop in demand — both in the passenger car as well as commercial vehicle segments — due to the intense slowdown. These 650 ancillary units have also been badly affected by the drop in orders by the large mother units in the automobile sector,” said Mr Manish Rawal, Chairman of the infrastructure committee of the Nashik Industries and Manufacturers’ Association (NIMA).
“Most of the ancillary units have cut down their shifts — from three shifts to two or from two shifts to a single shift. Moreover, they have also been working on five days, instead of having a six-day week,” he said. Mr Rawal added that “the 45-50 pc drop in production has severely affected the ancillary units. Over 6,000 workers — working on a contract basis — have lost their jobs so far,” he added.
Mr Varun Talwar, President of Ambad Industries and Manufacturers’ Association (AIMA), said, “The country is set to embrace BS-VI emission norms from April 1, 2020. BS-IV is equivalent to Euro-IV. Currently, the BS-IV norms are being implemented in the country. The Government has decided to skip the BS-V norms and straightaway implement BS-VI. This is one of the big reasons why there has been a drop in the demand for vehicles”
“Moreover, the price difference between petrol and diesel versions of the same vehicle, which is around Rs 1.5 lakh, will increase up to Rs 3.5 lakh due to new emission norms of BS VI. That is another reason that has negatively affected the demand for vehicles,” he said.
Automotive major M&M has already declared that there will be no production in range from 8 to 12 days at its various manufacturing units during July-Sept quarter of the current financial year. This month, M&M shut down its Nashik plant on four different days, while Bosch Ltd has suspended its manufacturing operations between August 26 and 31.
“Earlier, daily production at M&M’s Nashik manufacturing unit was 540 vehicles a day, including Scorpio, Verito, Marazzo, XUV and, Xylo. But we have reduced the production to 275 units a day because of the slowdown,” said an official from M&M. 

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