The shortage of skilled labor is a challenging issue for the auto components industry

Mumbai, Ta. 20 August 2020, Thursday

At a time when demand in the auto sector is improving in the country, shortage of skilled labor is becoming a challenge to auto parts production. The lockdown has forced workers to flee their hometowns and face a shortage of skilled labor from auto component manufacturers, industry sources said.

The auto component industry employs approximately five million people. It accounts for 2.50 per cent of the country's GDP and 8 per cent of exports. In addition to the social distance standard, the shortage of workers has affected production, said an official of the Auto Component Manufacturers Association.

We are still facing a shortage of skilled manpower. The recovery in the auto sector is looking faster than expected

The supply chain cannot even meet the sluggish demand.

Auto companies are concerned about supply chain shortcomings and locally enforced lockdowns. In addition to Ganeshotsav, auto companies want to speed up production in view of upcoming festivals like Onam.

In FY2030, the overall revenue of auto component companies fell 11.40 per cent to a three-year low of ૪૯ 2.50 billion. In the financial year 2016, the revenue figure was ૧ 2.10 billion.

Auto sales fell 15 per cent in the last financial year due to regulatory norms and the economic downturn. Auto companies are expecting an increase in sales during the festive season, given the recent sharp cut in interest rates by the Reserve Bank to boost demand in the country.