Less hiring, more firing likely for auto sector in 2013


With automobile manufacturers in India being hit hard by dwindling sales, only 51% of them are likely to hire for new jobs in 2013, according to job portal Naukri.Com.

In its latest survey on the Indian automobile sector, Naukri.Com said many companies are likely to even resort to firing employees to cut operational costs.



"The Indian auto market has been facing turbulent times, with car sales growth pegged to be the lowest in last 10 years. A survey with recruiters from the auto sector echoed a dismal sentiment with only 51% predicting new jobs to be created in 2013," the website said in the report.

This is in contrast to an earlier finding when 65% of the manufacturers surveyed in July last year talked of creating new jobs, it added.

Naukri.Com, however, said there is a ray of optimism as about 60% recruiters have said that they will continue with replacement hiring even if the companies do not create new positions.

Talking about dismissal of staff to reduce costs, the report said: "Employers said that layoffs will happen at the 8-15 years experience levels, while new jobs will be created for the 4-8 years experience category."

Further, talent crunch has also emerged as an area of concern for almost all recruiters with 78% of them saying that finding the right person matching with the job requirements is the biggest challenge faced by them.

On giving out annual salary hikes, Naukri.Com said: "When we asked recruiters on what increments they plan to give out to employees in 2013, then 50% said that the range will be within 10% to 15% and about 33% said that increments will be lesser than 10%."

Domestic annual car sales are set to be in the negative territory for the first time in a decade with industry body SIAM saying its growth forecast of 0-1% for this fiscal will not be met as gloomy macro-economic factors and negative sentiments continue to hit demand.

The statement by Society of Indian Automobile Manufacturers (SIAM) came on the back of January sales numbers showing a decline of 12.45%, the third consecutive monthly fall since November last year.

The last time domestic car sales witnessed a decline was in 2002-2003, when it dropped by 2.09%. In between, the lowest growth was witnessed during the 2008-09 global downturn, when car sales in India grew just 1.39%.

With the Budget for 2013-14 proposing higher taxes on imported cars and sports utility vehicle, which is the only growing segment at present, experts have opined that the Indian auto market is unlikely to see a revival in near future.