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Auto slowdown hits Hosur units
T E Narasimhan in Chennai | February 19, 2009 10:43 IST
The slowdown in the automobile sector has hit Hosur, an industrial town around 300 km from Chennai.
The town houses some 1,500 small and tiny units, of which 75 per cent are engaged in manufacturing components for the automotive industry.
Hosur Small and Tiny Industries Association president K Ramalingam said between 2002 and October 2008, the growth in the manufacturing industry here was around 10 per cent annually. This dropped significantly in the last couple of months to Rs 300 crore (Rs 3 billion) a month, compared with Rs 1,200 crore (Rs 12 billion) till Aug-Sept 2008.
Auto companies, which accounts for around 40 per cent of the total business in the town, have reported a 60-65 per cent drop in their order books.
This has impacted the business of the units here and many have downed their shutters. Besides, investments to the tune of around Rs 2,000 crore (Rs 20 billion) have been put on hold . The association estimates the job loss in the last three months at around 4,000.
The units have now started looking at other sectors especially power, said Ramalingam. They have approached public sector companies like Bhel, HAL and BEL for orders for survival.
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