Demonetisation effect: December saw sharpest dip in automobile sales in 16 years

Scooters and motorcycles account for almost 75 per cent of total vehicle sales and are a significant indicator of rural demand.

By: ENS Economic Bureau | New Delhi | Updated: January 11, 2017 6:01 pm
Demonetisation, Demonetisation effect, sale dip, automobile sale dip, car purchase dip, car purchase delay, motocycle purchase delay, vehicle sale low, no sale, cash crunch, cashless economy, indian express news, india news, business news In line with the dismal sales numbers, total vehicle production, too, fell 22 per cent in December 2016, led by a 25 per cent cut in production of two-wheelers and around 20 per cent cut in production of commercial vehicles.(Representational image)

AUTOMOBILE SALES for December fell the most for a month in 16 years pointing to a possible impact of demonetisation prompting consumers to delay their purchases of cars, motorcycles and trucks.

Data released by the Society of Indian Automobile Manufacturers shows that sales of two-wheelers slid 22 per cent in December 2016 compared to the figure in December 2015, marking the highest monthly contraction since SIAM started recording the data since 1997.

Scooters and motorcycles account for almost 75 per cent of total vehicle sales and are a significant indicator of rural demand.

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In line with the dismal sales numbers, total vehicle production, too, fell 22 per cent in December 2016, led by a 25 per cent cut in production of two-wheelers and around 20 per cent cut in production of commercial vehicles.

Overall, vehicle sales slipped by 19 per cent from 15.02 lakh units in December 2015 to 12.21 lakh units last month. This is also a new low since 2000.

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

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 per cent 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 daily business.

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

According to property consultant Knight Frank India, the housing market, too, came to a “complete standstill” during October-December 2016 quarter, with sales sliding by 44 per cent in the eight top cities, lowest level since 2010.

Housing sales in the residential segment fell to 40,936 units in eight major cities during October-December 2016, from 72,933 units in the year-ago period and 68,734 units in the previous quarter, according to the report. New home launches fell by 61 per cent to 24,316 units in the fourth quarter of 2016 compared with the year-ago period.

The 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.

The SIAM auto sales data for December, meanwhile, showed that while passenger vehicle sales for the month slipped by 1.4 per cent over the same month last year, three-wheeler sales fell the most by 36.23 per cent from 46,894 units in December 2015 to 29,904 units last month. The total commercial vehicle sales, too, declined by 5.1 per cent in December.

“This is the highest decline across all categories since December 2000, when there was a drop of 21.81 per cent in sales. The reason is largely due to the negative consumer sentiment in the market due to demonetisation,” said Mathur.

Domestic car sales stood at 1,58,617 units last month as against 1,72,671 units in December 2015, down 8.14 per cent. This is the biggest fall in passenger car sales since April 2014, when sales fell 10.15 per cent.

SIAM said that the number of units sold in December 2016 declined by 2.57 units from 11.67 lakh units in December 2015 to 9.1 lakh units last month. Within that, motorcycle sales declined 22.5 per cent and those of scooters by 26.4 per cent.

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  1. A
    Abhinav Gour
    Jan 11, 2017 at 6:45 am
    Shabaash modi, you are leading india in the right direction! The direction seems to be down and down and down! Whats your IQ modi?
    Reply
    1. H
      Haradhan Mandal
      Jan 11, 2017 at 4:09 am
      The FIRST successful MAKE IN INDIA policy by the Congress and UPA govts. Automobile sector was the first and has bee doing MAKE IN INDIA policy for a long time going back to more than 2 decades and created huge jobs in formal and informal sectors.
      Reply
      1. K
        Kachoriwala
        Jan 11, 2017 at 7:42 am
        Kal Kachereywala ney Dekha
        Reply
        1. P
          PCKULKARNI
          Jan 11, 2017 at 3:59 am
          Only bhakts like you know about complte issue of demonetisation. All others are fools.
          Reply
          1. S
            SubbuI
            Jan 11, 2017 at 5:47 am
            WHAT ELSE YOU CAN EXPECT FROM MODERN MOHMAD BIN TUGHLAQ.THE NALYAK NMODI HAD DONE ENOUGH DAMAGE TO INDIAN ECONOMY AND MORALITY. AS IF THAT IS NOT ENOUGH HE DECIDED TO DEMONETISE THE 86% RUNNING CURRENCY AT AS THE STROKE OF A WHIMSICAL MOMENT. THEN THE MENTALLY DERANGED MAN WANTED CASH LESS DIGITAL ECONOMY WHEN NO BASIC PREPERATON. THiS DECEIVER MADE RESRVE BANK IN TO A MODI TRUST AND ALL CREDIBILITY OF MOST PRESTEGIOUS CENTRAL BANK LOST FOR EVER. lt;br/gt;THIS GENEUS LATEST YAGNA MANTRA IS gt; NO CASH- NO CORRUPTION- NO BLACK MONEY LASTLY NO INDIA
            Reply
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              Ajay G
              Jan 11, 2017 at 2:49 am
              These are not s lost. These are only postponed. Succeeding quarters may see jump in s. lt;br/gt; lt;br/gt;Actual loss is to labourers and farmers.
              Reply
              1. R
                Rajesh
                Jan 11, 2017 at 7:50 am
                Before Modi all were very educated. Manzoor sahab, intention matters much much more than education. An uneducated can steal one bag of money but educated will steal away w country's wealth at on go. For example 2G scam, Common wealth scam and so on...
                Reply
                1. A
                  arc
                  Jan 11, 2017 at 8:50 am
                  Notice how Fekuji has stopped talking about ache din. Another Sanghi slogan meets the same far as Ram Tulla Mandir, Gujarat (flop) Model, Sabke saath Sabke visas.
                  Reply
                  1. A
                    AlsoIndian
                    Jan 11, 2017 at 4:51 am
                    Bhakts: You are desh-drohi. You can't say that. You have to bear this loss temporarily because soldiers are dying on the borders. It will have some bad effects but we have 14 lakh crore of black money now in the account. We are moving forward with the digitization. If you don't like our PM, go to stan. LOL LOL LOL!
                    Reply
                    1. A
                      Ashish Shrivastava
                      Jan 11, 2017 at 6:52 am
                      Matter is worried for every one, But now situation has been improved and various sectors has started speeding up in Jan-17.lt;br/gt;lt;br/gt;Jan-17 ry/ wedges will come in Feb-17 1st Week.lt;br/gt;lt;br/gt;Hope to see confidence in Market in Feb-17 onwards but Property to struggle further.
                      Reply
                      1. A
                        A.Murali Krishna
                        Jan 11, 2017 at 3:05 am
                        A good and great development for economy. In cities like Hyderabad, Aurangabad and other cities, SUVs were sold on cash payments. SIAM should have prohibited such s. Bribe Money collected from citizens, most of the corrupt from government departments, buy cars and run them as taxis.
                        Reply
                        1. A
                          ATUL
                          Jan 11, 2017 at 7:26 am
                          Blind Gupt Rooge of Impotent Feku G, Open your eyes and spill the truth.lt;br/gt;Feku G should consult AnnandeBehan before doing nationm building. Jootley jaitley should be awarded Bharat Ratna for giving fake data.
                          Reply
                          1. A
                            ATUL
                            Jan 11, 2017 at 7:29 am
                            Impotent Feku G, Open your eyes and spill the truth.lt;br/gt;Feku G should consult AnnandeBehan before doing nationm building. Jootley jaitley should be awarded Bharat Ratna for giving fake data.
                            Reply
                            1. S
                              sps
                              Jan 11, 2017 at 1:33 am
                              Every corner of citizen's life effected by Demonetisation....Many more side effects....
                              Reply
                              1. B
                                Boba
                                Jan 11, 2017 at 5:26 am
                                84 Lakh Workers have lost jobs since November 9, 2016. The worst effected are those working in Textile industry, carpet industry, Automobile, diamond industry, Zari, Bangles, Wood and carpentary, Chikan, Metal, Entertainment, Fruits and Vegitables, Grain Warehouse, Transport, Farming and over 100 such other trades
                                Reply
                                1. B
                                  Boba
                                  Jan 11, 2017 at 4:43 am
                                  Are the family members of 125 innocents who died in Bank or ATM queues also happy. If Bhakts are happy that does not mean w country is happy. Those in power are not effected but ordinary people have suffered. Black Money hoaders keep their money in swiss bank or abroad so no chance they are in trouble.
                                  Reply
                                  1. K
                                    Kaliyug
                                    Jan 11, 2017 at 1:32 am
                                    As soon as your buyers where they got the money to buy that automobile, they stop buying. This only shows that the s of cars depended on the amount of bribes each got while doing their duties.
                                    Reply
                                    1. D
                                      Dr.Damodar Biswal
                                      Jan 11, 2017 at 6:10 am
                                      One could have purchased cars/ scooters/motorcycles by issuing cheques or making online payment.Why paying in cash?The simple reason is it is black money which was previously used to buy these vehicles. Don't u think that Modi has done good for people like u n me who have no black money?Now people who were laundering money will fall in line n can not make a naked display of their wealth.Besides,they will be forced to pay tax.
                                      Reply
                                      1. D
                                        dharam chand
                                        Jan 11, 2017 at 4:27 am
                                        This is very good forlt;br/gt;1. Environments as less pollutionlt;br/gt;2. Safety - no accidentslt;br/gt;3. Less import of oil - strong economylt;br/gt;4. People will walk or run - good for healthlt;br/gt;5. Parking problem will be lesslt;br/gt;lt;br/gt;So this is a boon which is looked other way wrong...
                                        Reply
                                        1. D
                                          Dhibu
                                          Jan 11, 2017 at 3:43 am
                                          Auto Industry is doomed after Demonetisation. We could see worse in coming weeks or months. This is just beginning of aftershocks and disaster coming soon due to unplanned Notebandi.
                                          Reply
                                          1. D
                                            Dhobra
                                            Jan 11, 2017 at 7:08 am
                                            Situation is getting bad to worse and you say has improved. Even Feku/Jhootly admitting it will be pain for long time them only anything come for future generation. But no one is sure about present. Kal Kisney Dekha.
                                            Reply
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