New Delhi: Automakers have taken the lead in salary increases among all sectors in India, handing out double-digit hikes to their employees for fiscal 2024 amid a robust growth in sales, a Deloitte survey shows.
“Automotive OEMs are projecting the highest salary increments across all sectors in 2024, which is 100-140 basis points (or, 1-1.4 percentage points) above India average of 9.0%-9.5%,” said Neelesh Gupta, partner at Deloitte India.
Most organisations that follow the April to March fiscal cycle hand out salary increments during April to July. About 84% of the companies surveyed by Deloitte have already doled out this year’s increment.
According to sources familiar with the development, average increment for FY 2024 at top carmaker Maruti Suzuki and leading motorcycle maker Hero MotoCorp stood at about 13-14% and 10-11%, respectively. Hyundai Motor India, too, gave annual increments in early double-digits, they said.
Maruti Suzuki, Hero MotoCorp and Hyundai Motor declined to comment on queries sent by ET.
As per Deloitte, the average salary hike in the auto sector this year is 10.4%. The increments for top performers in the sector are higher than 2023.
“We are seeing sharper differentiation as the top performers’ hikes have been on an average 16.5% in 2024 versus 15.9% in 2023, which is 1.7x to that of an average performer,” Gupta said.
A Tata Motors spokesperson said the company rewarded its employees with higher performance pay in FY24 as an acknowledgement of their significant contribution in the overall growth and improvement in the financial performance of the organisation.
“For the last few years, Tata Motors has been following the practice of judiciously differentiating performance with rewarding top performers,” the person said in an emailed response to ET queries.
The bonuses in the industry this year are also higher than last year, according to experts.
“This is owing to strong top-line results across auto OEMs and increased Ebitda CAGR over the past three years,” Gupta said. “On an average, bonus pay out has been 108% of target.”
Over 20 leading automakers in India with average revenue of INR 8,000 crore and above were surveyed by Deloitte.
“At Mercedes-Benz, we drive a ‘high performance culture’ in addition to hosting curated initiatives that support employees’ overall career growth,” Santosh Iyer, CEO of Mercedes Benz India, said.
The annual merit increase cycle is only one part that supports performance evaluation at the firm, he said.
“We prioritise a fair and transparent system where high performance directly influences compensation adjustments, aligning closely with the industry benchmarking,” Iyer said. “Beyond financial compensation and recognition, we foster professional growth paths of individuals through targeted interventions curated to accentuate their future growth and hone their potential leadership skills.”
Automakers in India reported bumper sales for two straight years on the back of pent-up demand after the pandemic. Sales of passenger vehicles grew 8.4% to a record high of 4.22 million units in the financial year concluded March 31, 2024. Sales had grown 27% in the previous financial year. The growth rate moderated in the first two months of the ongoing financial year, on a high base.
