Print   Close

Slowdown Blues: Toyota Kirloskar floats voluntary retirement scheme for Karnataka plant employees

BusinessToday.In     October 8, 2019

Auto major Toyota Kirloskar Motors Ltd has initiated a voluntary retirement scheme for its unionised employees and supervisory category staff with a minimum of five years of experience at its plants in Bidadi, Karnataka. A joint venture of Japanese auto major Toyota and Kirloskar group, TKM is the fourth company to offer voluntary retirement for its employees after GM, Hero Motorcorp and Ashok Leyland as the ongoing auto slowdown continues to lead to heavy losses for companies.

"Company is pleased to announce Nava Jeevana Yojana (New Life Scheme), a voluntary separation scheme in order to support the employees financially to help career change to achieve their aspirations by separating from the organisation," a notice from Toyota Kirloskar says, adding it would be in force from September 23 to October 22.

Slowdown Blues: 2 lakh auto sector workers lost jobs in last 3 months, says FADA

TKM Vice-Chairman Shekar Viswanathan told PTI that the scheme was purely voluntary and had no relation to TKM's business situation. "The scheme is launched to support the employees to ensure career change with financial security and to achieve their aspirational goals or desired career by separating from the organisation," said Viswanathan. As per the scheme, those opting for it will get a compensation package in addition to the normal retirement benefits.

ALSO READ: Slowdown blues: After a crash in sales, auto dealers now witness 10% drop in service spends

Toyota Kirloskar Motors has over 6,500 employees in Bidadi, Karnataka. Its two plants in Bidadi have a production capacity of 3.1 lakh units per annum. One of its plants, which is operational since 1999, churns out models Innova and Fortuner, while its second plant rolls out models like Corolla Altis, Toyota Yaris and Etios range. With the auto industry facing the biggest crisis in two decades, declining auto sales have led to massive job cuts.

Sale of passenger vehicles in India registered another steep monthly decline in September, falling by 20.5 per cent over the same month last year as uncertainty over a potential cut in GST rate for cars kept customers away from dealerships for much of the month. Since November 2018, sales have declined in each month, an unprecedented run for the industry. All the major carmakers saw a high double-digit decline in September. Toyota Kirloskar posted 16.56 per cent decline in total sales at 10,911 units as compared to  13,078 units in the same month last year.

ALSO READ: Indian auto industry ready to increase capacity to be part of global supply chain: Vikram Kirloskar

Toyota Kirloskar Motor Vice-Chairman Vikram Kirloskar believes the Indian auto industry is facing a big structural issue with "affordability" becoming one of the most serious challenges due to several factors, including headwinds created by government policies. With the transition from BS-IV emission norms to BS-VI due in April 2020, Kirloskar says "affordability is the real problem".

Kirloskar says while the government has done a lot of things such as increasing and improving roads, "some things they have done, which I believe have created headwinds for the auto sector." He adds that a hike in road tax by many states which have increased the cost of buying. "It increases the cost (of vehicles), EMI goes up. EMIs as a percentage of a person's salary starts increasing. It is an affordability issue," says Kirloskar.

Manoj Sharma with PTI inputs

ALSO READ: Maruti Suzuki reports 27% decline in domestic PV sales in September 2019

ALSO READ: Mahindra and Ford sign pact to form joint venture worth Rs 1,925 crore

URL for this article :
@ Copyright 2019 India Today Group.