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Demonetisation tanks automobile sales to 16-year low

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New Delhi, Jan 11, 2017: Post demonetisation the sale of Automobiles in India for December fell the most for a month in 16 years with total vehicle sales declining by 18.66% as notes ban hits the industry hard.

According to data released by Society of Indian Automobile Manufacturers (SIAM), sales of two-wheelers slid 22 percent in December 2016 compared to the figure in December 2015, marking the highest monthly contraction since SIAM started recording the data since 1997.

Scooters, motorcycles and cars account for almost 75 percent of total vehicle sales and are a significant indicator of rural demand.

Vehicle sales across categories registered a decline of 18.66% last month at 12,21,929 units, from 15,02,314 units in December 2015, as per SIAM. “This is the highest decline across all categories since December 2000, when there was a drop of 21.81% in sales. The reason is largely due to the negative consumer sentiment in the market due to demonetization,” SIAM Director General Vishnu Mathur told media.

Except for the light commercial vehicles segment, which saw a growth of 1.15% at 31,178 units, all the other categories of the industry saw the decline in sales in December, he added.

“Almost half of two-wheelers sales comes from rural markets, which have been hit hard by demonetisation,” said Vishnu Mathur.

Alongside the grim auto sales numbers, there was bad news from the corporate sector and the realty segment. A primary survey conducted by SBI Research between December 30 and January 3 showed that the demonetisation drive had impacted 69 percent of businessmen in the country’s financial capital of Mumbai and the manufacturing hub of Pune.

Sectors such as construction and informal roadside trade were the worst hit by the note-ban, according to findings of the survey that covered different formal and informal business groups to ascertain the effects of demonetisation on a daily business.

A total of 175 responses were recorded and analysed, of which 40 per cent respondents were from Mumbai and the remaining 60 percent from Pune and nearby areas.

He also added that Delhi-NCR market was hit hardest with sales volume dropping by 53 per cent to 6,765 units in the fourth quarter of 2016 while new launches fell by a massive 73 per cent. Knight Frank tracks the primary housing markets of eight cities — Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad.

Wefornews Bureau

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