Most employees at automobile dealerships in the city had to take a 40 per cent pay cut through complete lockdown periods.
With the auto industry facing an unprecedented supply crunch owing to the chip crisis (mainly because of the pandemic) right before the festival season, employees across dealerships are bracing for more hardship.
Added to the woes are apprehensions of job losses following the US auto giant Ford’s announcement that it will stop making cars in India. Ford has two dealerships running in the city.
The automobile sector contributes 7.1 per cent of the national GDP and revival of the sector is vital for the Indian economy. But the anxiety that its retail workforce are living through paints a grim picture ahead of the festival season.
"Dealerships have paid only a portion of the total pay during complete lockdown periods," said Harsh Damani, the CEO of Federation of Automobile Dealers' Association.
Typically, a dealer’s margin ranges from 4.5 per cent to 6.5 per cent from a vehicle sale. All his expenses have to be made from that margin. The net profit that a dealer principal makes typically ranges from .75 per cent to 1 per cent of the total revenue, one source said.
A veteran salesman of a Maruti dealer said on condition of anonymity: “There has been a downsizing of the sales force and pay cuts as well. It is really becoming very difficult to make ends meet.”
He has recovered from Covid but his wife is still suffering from long-term Covid effects. “All my medical expenses have to be taken care of by me. The company stood by my side through my illness but I paid my medical expenses from the salary that I get,” said the sales-person.
Ford India’s decision to stop manufacturing in the country has put many frontline sales persons in a state of shock and they worry about their future.
“There was no intimation from the company that they would stop manufacturing. Just a day ago they asked for our sales projection and order bookings,” said an employee of Kaikan Ford in Baguiati.
“They were dispatching fewer vehicles since July but told us this was because of the chip crisis,” he said.
His dealership has around 40 salespeople and 45 service employees. “Technicians in workshops will continue to have their jobs as will back office and support employees. It is the sales people who will be hit hard.”
With Harley Davidson and General Motors (GM), the two other US biggies folding up earlier, the retail sector already has a glut of manpower.
“Those looking for jobs from closed dealerships will naturally pull the salary down. As it is, the salary of salespeople here is quite low,” said a Maruti dealer’s employee.