India overtakes South Korea in automobile production
India overtakes South Korea in automobile production :- With 2.57 million cars produced in the first seven months of the ongoing year, India has become the fifth-largest carmaker in the World.
For the first time in almost a decade, South Korea lost its top-five spot, producing mere 2.55 million cars during the same period.
Top five countries
Ahead of India are Germany with 3.62 million, Japan 5.40 million, the US 7.08 million, and China 12.79 million production.
If this continues, South Korea is at the risk of losing the fifth spot on an annual basis.
Last year, the county’s production was 4.55 million vehicles, compared to India’s production of 4.12 million units.
As per the media, currently the officials are concerned because the local automobile industry is facing a flump in the sales of domestic and export car which hit a seven-year low of merely 250,000 in August.
Reason for the fall
The flump came on the back of an ongoing labor strikes by the workers of Hyundai and Kia. Union labourers are demanding a big wage increase, while a temporary tax cut on the purchase of a new car was canceled in the July.
These strikes have resulted in a huge loss of production of nearly 101,400 cars worth 2.23 trillion ($2 billion), as reported by Hyundai’s top management.
“The high labor costs and militant labor unions have speed-up the manufacturing facility relocations and this has led to a decrease in South Korean automobile parts manufacturers’ annual sales by more than five trillion won ($4.52 billion) in the year 2015 alone,” said an industry source.
Meanwhile in India
Meanwhile, India’s domestic demand for vehicles is continuously rising due to the stable growth. The Car production accounts for almost seven percent of the economy and employs around 19 million people directly or indirectly.
One of the desired goals of the country’s Make in India program is for the nation to emerge as the destination of choices for designs and manufactures of automobiles and its components, with the output reaching a level of $145 billion, accounting for more than 10 percent of the total GDP and providing additional employment to its 25 million people in 2016.