Faced with the nightmarish prospect of job losses, auto sector employees have sought government's intervention through relief measures for the industry dented by truncating demand.

 

The employees cited that till now job losses have mainly occurred on the part manufacturers' side, however, if the current market conditions prevail then downsizing might become a reality even in the OEMs.

 

At present, the automobile industry has been impacted the hardest by a consumption slowdown which is a culmination of several factors like high GST rates, farm distress, stagnant wages and liquidity constraints.

 

Besides, inventory pile-up at the dealership level and stock management of unsold BS-IV vehicles have become a problem for the sector.

 

Accordingly, the industry's production levels have also receded as demand plunged, eventually leading to job losses.

 

Industry insiders at the auto cluster of Gurugram-Manesar, home to automobile majors such as Maruti Suzuki, Hero MotoCorp and Honda Motocycle & Scooter India, say that around 50,000 to 1 lakh temporary employees across the entire value-chain, including those from ancillary industries, logistics and raw material suppliers, have been sent on unpaid leave or sacked.

 

However, no authentic data is currently available on the extent of job losses, as most of these have occurred on the auto part suppliers' side.

 

"The industry is struggling to survive. It requires oxygen in the form of relief measures like lower GST taxes and better road networks," Kuldeep Janghu, General Secretary of Maruti Udyog Kamgar Union, told IANS in Gurugram.

 

"The auto industry is completely run by private sector and these companies will not be able to sustain or require the current levels of manpower, as production will fall on the back of declining demand." 

 

According to Satish Kumar, an employee with a tier-I parts manufacturer to an automobile major, stable policies are required, as the ever changing physical specification of parts due to newer norms has led some vendors to shut-shop.

 

"These changes based on newer norms have been taken from developed countries and require heavy investments even on the side of small parts manufacturers. Many vendors had to simply shut shop because they did not have access to those kind of resources," Kumar said.

 

"It seems that customers have also postponed purchases and are waiting for the change in technology from BS IV to BS VI."

 

In addition, the employees have asked the government to create an environment for easier access to finance that might prop-up sales.

 

"The collapse of NBFCs is a major factor for the sales downturn as these companies used to provide bulk of automobile financing," Rajesh Shukla, General Secretary of Hero MotoCorp Workers Union, told IANS.

 

"The government should look into the issue and create an environment where access to cheap finance is available." 

 

Last week, automobile sector's representatives met Finance Minister Nirmala Sitharaman to apprise her of the grim situation.

 

Recently, all major OEMs consisting of passenger, commercial, two and three wheeler manufacturers have reported a massive decline in domestic sales.

 

Figures from the Society of Indian Automobile Manufacturers (SIAM) showed that domestic passenger car sales in June went down by 24.07 per cent to 139,628 units. The July figures are awaited.

 

Consequently, sales slowdown led to curtailment of manufacturing with the domestic passenger cars' production coming down by 22.26 per cent to 169,594 units in June.

 

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

Saudi Aramco or the Saudi Arabian Oil Co will buy 20% stake in Reliance Industries Ltd (RIL)'s oil-to-chemical business comprising refining, petrochemicals and fuels marketing businesses of RIL, based on an enterprise value of $75 billion, says RIL chairman Mukesh Ambani.

 

Speaking with shareholders during RIL's 42nd annual general meeting (AGM), Mr Ambani said, "I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our oil-to-chemicals division. We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment. Saudi Aramco's interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India." 

 

Saudi Aramco and RIL have a long-standing crude oil supply relationship of over 25 years. Saudi Aramco is the world's largest and lowest cost-per-barrel producer of crude oil, is geographically close to India, and offers a wide range of crude supply options. To date it has supplied around two billion barrels of crude oil for processing at RIL's refinery at Jamnagar. 

 

The proposed investment would result in Saudi Aramco supplying 5 lakh barrels per day (BPD) of Arabian crude oil to the Jamnagar refinery on a long term basis.

 

RIL has also decided to restrict its mega Jamnagar refinery complex to only produce jet fuel and petrochemicals as it gets future ready with an oil-to-chemical strategy that would focus on value-added products by discontinuing all fuels the company produces.

After a very long wait, Reliance Jio GigaFiber is launching its broadband services from 5th September across the country with tariff plans starting from Rs700 per month. 

 

Speaking at the annual general meeting (AGM) of Reliance Industries Ltd (RIL), the company chairman Mukesh Ambani says, Jio GigaFiber service will be available to homes, merchants, SMEs and large enterprises.

 

"With JioFiber you get lightning fast broadband speeds of up to 1 gigabits per second (GBPS). You get a landline phone connection, at no additional cost. And you get a digital set-top-box that opens up unparalleled digital experiences within your home. Ultrahigh definition entertainment, virtual reality content, multi-party video conferencing, voice-enabled virtual assistants, interactive gaming, home security, and many other smart-home solutions. The digital possibilities are endless," Mr Ambani said.

 

According to the RIL chief, JioFiber will launch with a line-up of simple and easy to understand tariff plans. He says, "The average fixed-line download speed in the US which is the most developed economy is around 90 Mbps. In India, even the most basic JioFiber plan starts with 100 Mbps speed and we have plans all the way up to 1Gbps or 1,000Mbps. This will disproportionately improve the quality of fixed-line data in India. We are pricing our plans at less than 1/10th the global rates, to make it accessible for all. JioFiber plans will be priced between Rs700 to Rs10,000 per month to suit every budget and every need."

Customers should pay for only one service, either voice or data and not for both, Mr Ambani says, adding, "Voice calls from home to any Indian operator—mobile or fixed—will be absolutely free forever. We are today ending the era of high international calling rates on landline by announcing the lowest fixed line rates for international calling through two initiatives. First, the default tariffs on Jio Home Phone will be one-fifth to one-tenth of existing industry tariffs. Second, we are announcing an unlimited international calling pack at Rs500 per month, to US and Canada, thereby making it easy for families to connect."

JioFiber plans will come bundled with subscriptions to most leading premium OTT applications. "For the first time in India, we are introducing a disruptive concept for watching new movies. Premium JioFiber customers will be able to watch movies in their living rooms the same day these movies are released in theatres! We call this Jio first-day-first-show. We plan to launch this service in the middle of 2020," Mr Ambani added.

The company is also launching special monthly mobility service called Jio Postpaid Plus. Some of the unique features of this service include, India's first priority SIM-setup service at home, where the connection will be moved to Jio by visiting customer's home, and seamless data and voice connectivity across all devices, both at home and outside, Unprecedented family plans—one data plan for better control on GBs and sharing within the family, international roaming at a fraction of a cost with superior service experience, phone upgrades at preferential rates and all home solutions on the phone are other features.

Complete details of tariffs for Jio Postpaid Plus would be available from 5 September 2019 on Jio.com and MyJio application.

From 15 August 2018, Jio has invited registrations of interest from across the country for its JioFiber broadband services. "We received over 15 million registrations from nearly 1,600 towns. And based on these registrations, we have drawn up a plan to reach 20 million residences and 15 million business establishments in these 1,600 towns."

Earlier this year RIL has acquired controlling stakes in three leading Cable MSOs - Hathway, DEN and GTPL—who have direct relationships with over 30,000 local cable operators (LCOs).

The RIL chairman says, "Our LCO partners will now be able to offer the largest bouquet of high-definition (HD) channels to customers with better features, reliability and customer experience than even direct-to-home (DTH). We have designed our Jio set-top-box to accept the broadcast cable TV signals from our LCO partners. So that with every JioFiber home all our LCO partners will continue to have a steady stream of revenue for their broadcast TV business."

 

The company will also provide connectivity and Jio-Azure cloud service to Indian technology start-ups absolutely free.

 

Satya Nadela, chief executive of Microsoft had joined the RIL AGM through video-conferencing. He announced that Jio and Microsoft have entered long-term alliance to accelerate digital transformation in India and provide Office 365 and Azure cognitive services.