RAJKOT: The unprecedented fall in vehicle sales in the country has hit the Rajkot’s famed auto components and engineering industry hard.

At least 10,000 workers have lost jobs in the last one and-a-half-month due to falling demand and industry saddled with heavy inventory. Industry sources said that the production too has been cut down and the number of working days in a week reduced in the last one month.

“The demand for auto parts has plummeted by nearly 50%. We are sustaining only on exports,” said Paresh Vasani, promoter of Turbo Bearings and president of Rajkot Engineering Association. The company, which was working in three shifts for 24 hours, has curtailed production and operating two shifts only.

The units, most of which are small-scale

(SSI), employ around one lakh people.

Rajkot Chamber of Commerce and Industry (RCCI) vice-president Parth Ganatra told TOI: “As per our estimate, nearly 10,000 people including contractors are jobless due to the slowdown and the situation is only expected to worsen in the coming two-three months.”

Ganatra, who also owns an engineering unit, added, “Many units are working for just two or three days a week due to poor demand. There are some who have sent workers on compulsory privilege leave.”

Most people sacked were hired in last three months

According to industry body Society of Indian Automobile Manufacturers (Siam), a total of 2.39 lakh passenger vehicles (cars, UVs/SUVs and vans) were sold in May 2019, which was 21% down from three lakh units in the same month during the previous year. Passenger vehicle sales were also down 17%.

J K Kikani, personal manger of Echjay Industries, said, “Since the last week of May, companies are placing orders, but are not actually taking the goods as they don’t have enough orders. We are ourselves sitting on an inventory pile of Rs 18 crore to Rs 20 crore.” Echjay supplies parts to auto majors including Mahindra & Mahindra, Tata Motors and Ashok Leyland. Kikani said majority of the people who have been relieved were recruited in the last three months.

Rolex Rings, another big player in auto components industry, has also decreased the number of working hours. “The demand for auto components has fallen between 30 to 50% in the past three-four months. The only silver lining is robust orders from the US.”

The industry is making a strong pitch for reduction in tax as auto parts attract 28% GST.