The Indian auto sector is going through many types of problems at the moment. Thousands of people have been discharged by the auto companies, while the sword is hanging on several thousand employees. The special thing is that the decline in the business of the Indian auto industry has had an impact on the business of the companies that supply them.
Due to the rapid decline in the Indian auto industry, 400 companies supplying parts of vehicles have suffered a loss of Rs 10,000 crore in this financial year. The fall in the auto industry in 2019 has also had an impact on the income of AIFI (Association of India Forging Industry).
Let us know that the annual revenue income of AIFI was about 50 thousand crore rupees last year. Two senior members of the Forging Industry Association of India told Aaj Tak that the fall in the auto industry had an impact on the 400-member industrial units which fall under AIFI. The companies affected by this are 180 to 200 manufacturing units. 83% are small scale industrial units. 9% are medium units and the rest are large scale industrial manufacturers.
Small industry has suffered the most due to the decline in the auto sector. Forging industry received revenue of about 50 thousand crore rupees from the production of the year 2018-19, but in this financial year, the forgings industry is estimated to have a loss of 9 to 10 thousand crore rupees.
The decline in vehicle sales will mainly affect small-scale units. In comparison, small scale units will have to pay a bigger price as compared to medium and large scale forging industries.
Adverse effects occur when the inventory gets stuck, funds are held or liquidity is very pathetic. The auto sector is in crisis due to the change from BS-4 to BS-6. Car sales have fallen sharply in the wait for BS-6.
The problem is that due to the decline in the auto sector, the goods of small industries are not being consumed. In case of non-consumption of auto parts, the small companies making them will have to suffer big losses. If raw materials are left, then the companies making them will be forced to reduce the prices of auto parts. As a result, a large number of people working in small scale industries may have to lose their jobs.