Recessionary trends impacts the Pune’s auto sector including thousands of small ancillary units that have suffered set backs in terms of reduced business.
Pune’s industrial belt of Pimpri-Chichwad saw the time bound closure of Tata Motors plant in the last two months and its effect is spilling over to thousands of small ancillary units.
The Tata Motors plant’s three-day partial closure of its commercial vehicle sector closes today (31 December). Tata Motors and other auto-makers such as Bajaj, depends on 7,000 and more small ancillary units in the area for their sub-assemblies. A slump in demand for both four-wheeler and two-wheelers in auto sector and the resultant measures to match production accordingly, has brought down the business of the dependent small industries to just 25% of what it used to be in October 2008, sources said.
The present scenario is affecting these units which employ an estimated 70,000 workers involved in the making of various auto components. Small industries were not in a position to retrench skilled workers due to reduced job orders because it would be difficult to reclaim them once the things begin to look up.
Reportedly, to allow the small dependent units to tide over the prevailing situation, the government should announce exemption for them in the VAT and excise duties.