The auto sector is undergoing a downturn, while Toyota Kirloskar Motor has now asked its permanent workers to take voluntary retirement. Earlier, it was expected that there will be a jump in auto sales in the auto sector in the festive season, but the performance was not as expected. According to the news, Toyota Kirloskar Motor, the Indian subsidiary of Japan's Toyota Motor Corporation, has become the fourth company to introduce a VRS or voluntary retirement scheme for its employees. Earlier, General Motors, Hero MotoCorp, Ashok Leyland had announced the launch of VRS two months ago.
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It is to be noted that Ashok Leyland also launched a similar scheme for its employees in August and also cut the production of vehicles. Following this, Hero MotoCorp, a two-wheeler maker, launched the VRS scheme for its employees in September to meet the losses. At the same time, experts say that the companies bring such schemes mainly for the employees so that the operation cost is reduced and their profit is increased. The scheme includes those who are permanent employees and have more than five years of working experience in the company. Although the company has not yet launched any scheme for temporary employees, the company says that their contract will not be renewed.
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At the same time, the VRS scheme is quite beneficial for the employers as well as the employees. Experts say that this scheme is more beneficial than excluding any employees. By taking such steps, companies not only demonstrate the importance of the employee but also try to reduce the cost of the employees. So that they can balance their operational costs and margins due to lower vehicle sales. In the first six months of this year, production of Toyota Kirloskar has decreased by 37%, Hero MotoCorp production by 36%. Apart from this, between April and September 2019, Ashok Leyland has cut production by 18 per cent.
