Mumbai: A large number of ancillary units of auto components in industrial sector of Aurangabad are on the brink of closure as a cascading effect of economic slump, experts feel.
“The situation is really bad for more than a fortnight. Most of the ancillary units are closed and are expected to reopen by January 5 and 10th,” Marathwada Association of Small Scale Industries and Agriculture (MASSIA) president Anup Kabra said.
However, merely reopening of these small and medium units does not spell the end of tough days. Financial funding is the major concern being voiced by most of the industrialists here.
Around 30,000 to 40,000 employees may lose their jobs if steps are not taken to prop up the falling sector, MASSIA former president Ranjitsingh Gulati said.
Already around 10,000 to 12,000 casual labours have been laid of as an impact of economic slump, he said.
Delay in payments from large units on whom the ancillary units depend, renewal of loan proposals by banks and hand-to-mouth finance are the reasons which are worsening the state of small units here, feels Kabra.
“Large units should make the payment on time. Small units suffer a lot if payment is delayed for 100-150 days from their end,” he said.
Government schemes and discarding older vehicles could be the solution to perk up the ancillary units, the entrepreneur feels.
Two-wheeler manufacturer Bajaj Auto Ltd (BAL), which has a production plant in Waluj Industrial Area of the city and on which most of the ancillary units here are dependent, kept the plant closed for 10 days from 26 December to 4 January this year against the five-day annual block closure.
Bajaj’s Waluj plant has an installed capacity of manufacturing around a million vehicles a year, and it is where the company makes the Platina and XCD range of motorcycles as well as three-wheelers, both for passengers and cargo applications.
As per reports, Bajaj Auto Ltd posted a decline of 37% during the festival season of November 2008 (year-on-year).
There were also reports of production cuts at Waluj to keep in-step with market requirements.
No BAL official was available to comment on the issue of extended closure.