India’s economy is experiencing a slowdown, impacting various sectors differently.

The car industry in India is facing significant challenges, leading to concerns about potential mass layoffs. Over 100,000 auto workers in India have lost their jobs due to the ongoing economic downturn. In August, car sales plummeted by 41%, marking the industry’s tenth consecutive month of decline – the sharpest drop in twenty years. The Indian car sector is a major contributor to the country’s GDP, accounting for approximately 7% and employing over 35 million individuals directly or indirectly. The current decrease in demand has raised apprehensions about further job losses.

The broader Indian economy is also feeling the effects of a slowdown, evidenced by the growth rate of 5% in the last quarter, the slowest in five years. This deceleration coincides with a banking crisis that has made credit access more challenging for Indian consumers. Additionally, private investment in the Indian economy has receded significantly, leading to reduced consumer spending.

One possible factor influencing the decline in India’s car industry could be the shift towards electric vehicles. The Indian government is pushing forward its agenda to transition to electric vehicles gradually over the coming years. Some analysts suggest that this transition is contributing to the decline in traditional vehicle sales in the country.