"I have never seen at a situation where (demand slump) is unrelated to your pocket spend or the recession, there is enormous money out there. But people are saying they want to wait," Mahindra told reporters on the sidelines of the Auto Expo here.
"Everybody is in a state of limbo, I have never seen anything like this before," he said.
It is not only investors and analysts who are waiting for elections but consumers are also saying they are going to wait, he added.
The overall sentiment of consumers is low and they are not spending despite having money, which has led to slowdown in auto sales, among others, Mahindra added.
He, however, declined to comment on which party coming to power would be good for the country, but said with the emergence of AAP, a significant development in the Indian landscape, whichever party comes to power "there has to be better governance".
He also said not much is expected from the existing government in transition.