Small and Medium Scale Industries in Pimpri-Chinchwad, Moshi and Chakan areas are feeling the brunt of the ongoing slowdown in the automobile sector, with work down by 20 per cent and labour unions fearing that mass layoffs may begin.
Most units are now running only two shifts, as opposed to the usual three. Spread across the industrial areas of Pimpri-Chinchwad, Chakan, Bhosari, Moshi and Talawade, 12,000 small and medium scale industries provide jobs to around four-five lakh people. Sandeep Belsare, president of Pimpri-Chinchwad Small and Medium Scale Industries Association, said around 7,000-8,000 units are part of the automobile sector, producing auto ancillaries as second or third vendors for auto OEMs.
“Thus, the ongoing slowdown has affected them the most and they in turn have reduced their production,” he said.
The problem, Belsare said, started from January and has continued worsening since then. The slowdown comes at a time when most SMEs increased their production capacity in anticipation of new orders, he added.
“The auto sector had shown healthy growth, because of which OEMs and vendors expanded their capacity. Most (SMEs) availed loans to expand their capacities. But now, with the slowdown, they are left high and dry,” he said.
Now, apart from suspending their third shifts, SMEs have also stopped overtime allowance for workers. Belsare said another reason for the slowdown is the recent announcement regarding electric vehicles. The perceived push for electric vehicles, Belsare said, stopped many consumers from investing in automobiles.
“Statements like diesel vehicles will be banned has confused the buyer, who has put a lid on vehicle-buying plans,” he said.
Dilip Pawar, working president of the Shramik Ekta Mahasangh, a federal body of trade unions, said the fear of mass layoffs is looming over the sector.
“Many companies are in talk with unions about the slowdown and urging to take alternate leaves in view of less work,” he said, adding contractural workers were likely to be let go first.