Amidst a slowdown in auto sales and with no significant signs of recovery in market sentiment, Toyota Kirloskar Motor (TKM) announced a voluntary retirement scheme (VRS) for its permanent employees, as per a Mirror Now report.
As a result, the Indian subsidiary of Toyota Motor Corporation of Japan becomes the fourth auto company after the General Motors, Hero MotoCorp and Ashok Leyland to launch VRS for employees in the last two months.
As per the report, the company had launched the scheme on 23rd September and would run up to 22nd October 2019. The scheme is for permanent employees with over five years of experience, the report added.
"The company is not yet countering in the temporary workforce as of now but their contracts have not been renewed by the automaker," added the report.
Earlier, the country's leading commercial vehicle maker Ashok Leyland had also followed a similar route in the month of August following a series of production cuts. Soon after, two-wheeler market leader Hero MotoCorp also offered VRS for its employees in September to fight against the company's depleting margins.
Normally, companies issue such employees separation scheme to cut their operating costs and return to profitability without firing employees. With Toyota becoming the fourth automobile company to offer VRS, it seems that the slowdown woes will continue to persist in this sector.
In the first six months of the current financial year, production of Toyota Kirloskar crashed by 37 percent, while Hero Motocorp's production declined by 36 percent. Similarly, Ashok Leyland decreased its production by 18 percent during April-September 2019. A million contractual manufacturing jobs are at risk in the automobile sector due to the consumption slowdown, as per Rajan Wadhera, President of the Society of Indian Automobile Manufacturers (SIAM). Will the festive season bring any cheer for the automobile sector, only time will tell.