One month after Demonetisation, December saw the sharpest dip in the sales of Automobiles in India over the last 16 years.
Car sales were at their lowest in the last 16 years in the month of December, 2016. This is being blamed largely on the effects of demonetisation which forced consumers to delay or even ditch their purchases of two or four-wheelers.SIAM or the Society of Indian Automobile Manufacturers has released data that shows sale of automobiles slipped by 22 per cent in December 2016 as compared to the sales figures of December 2015. This slip in sales is by far the biggest recorded by SIAM ever since its incorporation in 1997. The overall dip in the sale of automobiles has been recorded at 19 per cent from 15.04 lakh units in December 2015 to 12.21 lakh units in December 2016.
Not just the sale of automobiles, their overall production also went down by 22 per cent as carmakers scrambled to cut production in the face of falling demand. The month of December 2016 saw a dip in the production of two-wheelers by 25 per cent and the production of commercial vehicles by 20 per cent.
75 per cent of the total sale of vehicles is accounted from the rural sector, which was hit hard by the effects of demonetisation. Almost half of the two-wheelers sale came from the rural markets which has now gone down hill. Not just the automobiles sector, demonetisation has impacted the corporate and realty sector too. A primary survey conducted by SBI Research between December 30 and January 3 shows that 69 per cent of the businessmen in the country’s financial capital have been impacted by the demonetisation drive.