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News18 » Auto
2-min read

Did Demonetisation Affect Car Sales?

Several automakers reported a dip in sales during the month of December 2016.

Press Trust Of India

Updated:January 3, 2017, 11:27 AM IST
Did Demonetisation Affect Car Sales?
For representation purpose. (Photo: Reuters)

Reflecting challenges faced by the automobile industry in the wake of demonetisation, auto majors Hyundai Motor India, Mahindra & Mahindra and Ford India have reported a decline in their domestic sales in December. Other firms such as Tata Motors, Renault, Nissan and Volkswagen, however, reported an increase in their Indian sales in December.

Hyundai Motor India Ltd (HMIL) said its domestic sales in December were at 40,057 units as against 41,861 units in the same month previous years, down 4.3 percent. HMIL Senior Vice-President, Sales and Marketing, Rakesh Srivastava had stated that demonetisation impacted consumer sentiment creating a challenge and walk-ins at showrooms were down by around 40 percent while overall retail sales were down by 24-25 percent immediately after the note ban.

Retail sales had, however, picked up in December by 5 percent as compared with the same month previous year, he said while adding it might take a quarter to normalise.

Mahindra & Mahindra's sales in the domestic market were down 1.5 percent to 34,310 units last month as compared to 34,839 in the year-ago period. "The auto industry continues to go through challenging times, grappling with the short-term effects of demonetisation as well as reduced and postponed purchase decisions. However, we believe there will be a gradual pick-up in demand starting next few months," M&M Chief Executive (auto division) Pravin Shah said in a statement.

Likewise, Ford India also saw its domestic sales dip by 6.04 percent to 5,566 units last month as against 5,924 units in the same month a year ago. "As we move in 2017, the industry does face some short-term headwinds given the uncertainty regarding the impact of demonetisation and GST, while the medium to long term outlook continues to be positive," Ford India Executive Director (Marketing, Sales & Service) Anurag Mehrotra said.

Hinduja Group’s flagship company Ashok Leyland reported a 12 percent decline in total sales at 10,731 units in December 2016. The company had sold 12,154 units in December 2015.

The country's largest car maker Maruti Suzuki India had posted December domestic sales at 1,06,414 units, down 4.4 percent from 1,11,333 units in December 2015.

Some companies, however, managed to increase their sales in December. Tata Motors reported 35 percent increase in its domestic passenger vehicles sales at 10,827 units last month as compared to 8,069 units sold in December 2015, Tata Motors said. "We continued our growth momentum in December on the back of robust sales, led by positive response for the Tata Tiago. This has resulted in planned stock reduction in the network," Tata Motors President, Passenger Vehicle Business, Mayank Pareek said.

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| Edited by: Manav Sinha
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