Auto slowdown dents BJP's prospects in state polls

Automobile manufacturing belts, like Gurugram-Manesar in Haryana and Chakan-Pune in Maharashtra, house companies such as Maruti Suzuki, Hero MotoCorp, Honda Motorcycle and Scooter, and thousands of auto ancillaries.

Also, as the economic slowdown hit industries in these states, the BJP could not record the level of electoral victory it was expected to achieve.

"The people here faced hardships due to the slowdown and lay-offs, which impacted the BJP's electoral prospects to some extent," said Rajesh Shukla, General Secretary of the Hero MotoCorp Workers Union.

In Haryana, the BJP failed to cross the halfway mark in the 90-member Assembly. The BJP won 40 seats, but all its Ministers lost, barring one. The BJP had set a target of winning 75 seats in Haryana.

In Maharashtra, the BJP had targeted 200 plus seats in the 288-member Assembly. It's poised to win 103 seats and its ally, the Shiv Sena, over 57 seats.

According to industry insiders and locals, the economy of these areas is dependent upon the income generated via employment and other businesses associated with automobile manufacturing.

The slowdown, which led to lay-offs and lesser numbers of production days at the factories in these belts, impacted local businesses more than anywhere else in the country.

The auto industry is facing a demand slowdown on account of high goods and services tax (GST), farm distress, stagnant wages and liquidity constraints.

In September, all major original equipment manufacturers (OEMs) comprising passenger, commercial, two- and three-wheeler manufacturers reported massive decline in domestic sales.

As per the Society of Indian Automobile Manufacturers (SIAM) sales figures, the overall sectoral off-take in the domestic market plunged 22.41 per cent in September. In August, it had declined 23.55 per cent.

This level of downturn was witnessed only once earlier, in December 2000, when the decline was registered at 21.81 per cent. The available data series started in 1997-98.

According to industry estimates, around 15,000 contractual manufacturing jobs have been lost and another million are at risk if the slowdown is not reversed.

( With inputs from IANS )