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The Indian automotive sector employed over **** million people in fiscal year 2019. The employment figures were relatively small compared to the EU automotive industry that employed around *** million personnel. In the United States, part dealers and motor vehicle sector had around 2.8 million employees on their payrolls in 2021. Even then, India had one of the largest global automotive markets in 2019. The sector, however, started facing the effects of a slowdown in terms of sales and rising inventory numbers mid-way through 2019, and the growth was further impacted by the coronavirus pandemic.

Employment loss

Slumping sales and halts in production triggered massive job cuts throughout the industry. Component manufacturers and dealers had to lay off around 350 thousand workers since April 2019. The adversity was not limited to automakers only. Tire manufacturers also had to cut down the workforce due to the sales slump. Temporary suspension periods were also implemented by leading carmakers in the face of declining demand.

Impact

The automotive industry contributes a share of about percent to India’s GDP each year. It also accounted for almost half of the country’s manufacturing output. Maruti Suzuki, the country’s biggest carmaker, reduced its temporary workforce by about *** percent. Tata Motors and Mahindra on the other hand, faced periods of stagnant productions.