facturers and employees who have
taken a hit. Other stakeholders have
been affected too. The logistics sec-
tor is facing a business loss of 25-35
per cent. “Our trips have come down
severely and there is a revenue loss of
40 per cent. There are no sales; no de-
mand,” says Ashwini Kaushik, Man-
aging Director of Chennai-based TR
Finished Vehicles Logistics Solutions,
which transports cars of major manu-
facturers. “Since last December, when
the slowdown started, and now, the
industry has destabilised. Our trips
have reduced and the drivers, labour-
ers, porters... all are suffering. We
can’t give them incentives and other
benefits. People in the industry do not
know how to pay the EMIs or recov-
er revenues,” says Kaushik, who has
around 150 vehicles in his f leet. Sel-
varaj, another city-based logistics pro-
vider whose company transports fin-
ished two-wheelers, says his business
and revenue have both come down by
25-30 per cent since January.
The other segment facing heat is
dealers. Not only have their revenues
and margins shrunk, storing unsold
inventories has become a hurdle. “We
used to store inventories for a month.
Now we have inventories for about
two-and-a-half at our outlets,” says a
senior manager with a leading dealer
of Maruti Suzuki. He did not wish to
be named. “Our revenues have gone
down and we are not able to pay perks
and incentives – which form more
than 60 per cent of employees’ sala-
ries.” He added that they have closed
a few sub-contracts that they had out-
sourced to other companies.
Allied businesses such as contract
labour providers are reporting fall
in business. According to industry
sources, companies have stopped re-
cruiting new contract labourers and
the manpower requirement has come
down substantially. L.K. Iyyappan,
proprietor of Sriperumbudur-based
Sri Maruti Enterprises, which sup-
plies contract labourers to OEMs andauto ancillary units, says the inquiries
and demand for labourers has come
down by more than 70 per cent. Com-
panies are also reducing employee
benefits. “Earlier, my clients used to
provide accommodation, travel and
food free to daily wage labourers.
However, this year they have clearly
mentioned that there won't be any
freebies and employees have to man-
age everything on their own,” he says.
The entire auto industr y and a llied
services are in a tight spot but some
like Thyagarajan of Mudhra want
to stay positive. “This is a temporary
phenomenon. The industry will pick
up and we will have an upward swing.
Some auto majors are coming up with
new models. That shows the business
will again pick up,” he says. Till that
happens and the wheels of the indus-
try start moving again, auto ancillar-
ies have to make do with less.Radhika K.T.P. is a Chennai-
based freelance journalist