Due to the slump in the profits of the automobile industry, small scale automobile businesses in Peenya have been facing a tremendous loss in the past few months.
The automobile businesses in Peenya have averaged a 60% drop in their revenue. With more than 8,000 small and medium scale industries, Peenya is one of the biggest industrial areas in all of South-East Asia.
President of Peenya Industries Association, Srinivas Asrana, says, “The automobile industry (in Peenya) is going through a huge loss. Government’s decision to shift from BS4 to BS6 vehicles is the biggest reason behind this.”
80% of the industries in Peenya deal with engineering services and they ultimately contribute to the automobile sector.
Hemraj Solanki is a rubber manufacturer who says he has stopped receiving orders from his clients. “It (Business) is dull. I am only doing a 30% Business. Usually during festive season my Business would be booming but this year is the worst I’ve seen. There is no money flowing in the market and people are not willing to buy Cars”, said Hemraj.
Many automobile industries in Peenya have been temporarily forced to shut down as the owners are failing to provide wages to the workers.
Chandrakant Gowda, owner of SS Engineers, says, “My annual turnover has come down from 30 lakhs to 5 lakhs. We are almost at a breakeven point and on the verge of shutdown. It’s a no-profit business as of now. I’ve not fired my workers but I am not letting them do overtimes at all.”
Business experts believe that the recession in Peenya will continue at least until March 2020 when BS4 vehicles won’t be sold anymore.
Srinivas Asrana says that the small scale industries in Peenya need support from the government. “The reduction of GST on job work from 12% to 5% will help a lot. Small and medium scale industries should also be given relaxation when it comes to the due date of paying GST,” said Asrana.
Asrana further added that the revival of the automobile industry in Peenya will take at least 6 to 7 months.