'Part of the business': Maruti says 3,000 temporary jobs cut in slowdown

Maruti chairman R C Bhargava wants the government to reduce taxes to help the automobile industry

Maruti Suzuki India hasn't renewed the employment contracts of 3,000 temporary workers because of a slump in the automobile industry, the carmaker's top executive has said.

"This is a part of the business, when demand soars, more contract workers are hired and reduced in case of low demand," said Maruti chairman R C Bhargava while speaking to TV news channels.

Bhargava was responding to a question on how the slump and production cuts have affected Maruti. "Around 3,000 temporary workers have lost jobs with Maruti Suzuki," he said, adding permanent workers were not impacted.

Reiterating that automobile sector creates job in the economy – from sales, service, insurance, licensing, financing, accessories, drivers, petrol pumps, transportation - he cautioned, "fewer automobiles (sales) will impact jobs on a larger scale."

These are not even visualised. The impact is much higher, he added.

When he was asked if the industry has hit the rock bottom in terms of sales in July, he said revival in the sense of positive growth will start from third or fourth quarter of this fiscal, partly because of the lower base effect.

"Hopeful to see strong revival in FY 2021. By then transition to BS VI will be over," he added.

Commenting on expectations from the upcoming festival season, he said due to the good monsoon, rural sales may pick up.

"If government makes an announcement and takes positive actions it should help improve the situation," he said, however, it was up to the government to decide on GST rate cut and take the corrective action.

"Personally we would like to see GST benefits linked to greener/cleaner cars...The government gave tax cut on EVs but hybrid should be given duty cut. There should be tax cut on CNG vehicles," he added.