Pune: Car sales dipped by 30 per cent after demonetisation

Demonetisation would be the single largest disruption that the manufacturing sector has seen this year. Sanjiv Shah, treasurer of the Pune Metal Finishers Association, said this move had affected the automobile sector the most with sales of cars and two-wheelers registering a 30 per cent dip.

Shah said in the first month post demonetisation, he faced problems in paying salaries to his employees. “Demonetisation was announced on November 8 but prior to that, I had withdrawn the total amount in denominations of Rs 500 and Rs 1,000. However, when my employees could not get these notes exchanged, they brought them back to me,” he said. Due to the heavy rush in banks, the first month was a challenge in terms of payment but the month after, Shah ensured everyone was paid by cheques. “With banks unable to dish out cash, employees had a hard time footing their monthly expenses,” he said.

Watch What Else Is Making News:

The automobile industry, Shah said, had faced the brunt of noteban as it was reflected in the 30-40 per cent dip in sales over the last two months. “Certain portion of automobile sales was carried out in cash and that stopped subsequently. However, the ripple effect of it was felt across all verticals,” he said. Companies, Shah said, also faced lower productivity as employees had to queue up in banks to withdraw cash. “In my company, of every 100 workers, at least 30 used to queue up in banks, resulting in loss of productivity. Due to this, the company often failed to meet its targets,” he said.

Non-circulation of cash had affected the overall economics of the country. “Till the time the cash situation does not ease up, the economy will face hurdles,” he said.