Motorcycle and scooter sales in November are likely to be adversely impacted due to the demonetisation of R500 and R1,000 notes, dealers and manufacturers said.
According to them, approximately 35-40% of the total two-wheelers bought in rural India are financed, while the rest are bought in cash transactions. It is the latter category that is likely to postpone decisions to purchase new vehicles, which is likely to persist till the situation stabilises.
“There may be a slight correction in the November sales numbers due to this move, since rural population is more inclined to buying vehicles in cash which may be hindered due to the decision to scrap the R500 and R1,000 notes,” said an executive of a two-wheeler firm. Economy-segment bikes were expected to see a spike in retail volumes due to a good harvest and the coming wedding season. Firms like Hero MotoCorp, in whose whose case 60% of total sales come from the rural market, may see modest growth in retail volumes in November.