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News18 » Auto
2-min read

Is BJP's Haryana, Maharashtra Result a Direct Impact of Slowdown in the Indian Auto Industry?

Both the states have massive automobile manufacturing belts such as Gurugram-Manesar in Haryana and the 25 km Motown corridor in Talegaon-Chakan in Maharashtra.

IANS

Updated:October 29, 2019, 2:59 PM IST
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Is BJP's Haryana, Maharashtra Result a Direct Impact of Slowdown in the Indian Auto Industry?
BJP President Amit Shah speaks after party's victory in the 2019 Lok Sabha elections, at BJP office in New Delhi. (Image: PTI)

Auto sector's diminishing fortunes seem to have somewhat eroded the BJP's electoral prospects in major automobile producing states of Haryana and Maharashtra. India's mini Detroits which were booming till recently have careened out of control.

Evidently, both the states have massive automobile manufacturing belts such as Gurugram-Manesar in Haryana and the 25 km Motown corridor in Talegaon-Chakan in Maharashtra.

These belts house the likes of Maruti Suzuki, Hero MotoCorp, Honda Motorcycle and Scooter, VW, Audi, Skoda, M&M, Bajaj Auto, Daimler Benz, and thousands of auto part manufacturers.

Consequently, the slowdown has hit the major industry -- auto manufacturing -- of these states hard and thereby hampered the level of electoral victory that the BJP was expected to achieve.

"The BJP has performed poorly due to the slowdown. People here have faced hardship due to the slowdown and lay-offs. This has impacted BJP's electoral propects to some extent," said Rajesh Shukla, General Secretary of Hero MotoCorp Workers Union.

In Haryana, the BJP failed to cross the halfway mark in the 90-member Assembly. It won 40 seats, but all its state ministers lost, barring only one, including Anil Vij.

The BJP had set a target of winning 75 seats, while in Maharashtra, the party had targeted to win over 200 seats out of 288 seats.

In Maharashtra, the BJP is poised to win 103 seats while its ally Shiv Sena is also set to win on over 57 seats.

Industry insiders and locals said that economies of these areas are predominantly dependent on the income generated via employment and other businesses associated with auto manufacturing.

As such, the slowdown which led to lay-offs and lesser numbers of production days at the factories based in these belts impacted local businesses more than other parts of the country.

At present, the auto industry is facing a severe demand slowdown on account of high GST rates, farm distress, stagnant wages and liquidity constraints.

The sales and production have plunged dramatically, leading to job losses.

In September, all major Original Equipment Manufacturers (OEMs) comprising passenger, commercial, two and three-wheeler manufacturers reported massive declines in domestic sales.

As per the Society of Indian Automobile Manufacturers' sales figures, the overall sectoral offtake in the domestic market plunged 22.41 per cent in September 2019.

In August, the sales data had showed that overall sectoral off-take in the domestic market had plunged 23.55 per cent.

This level of downturn was witnessed only once earlier, in December 2000, when the de-growth was registered at 21.81 per cent. The available data series commences from 1997-98.

Moreover, the industry has estimated that around 15,000 contractual manufacturing jobs have been lost and another million are at risk if the slowdown is not reversed.

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