Auto sales fall almost 19% in Dec due to demonetisation

LCVs was the only segment to have registered a positive growth in December.
The Dollar Business Bureau
Prime Minister Narendra Modi’s demonetisation drive has considerably impacted India’s automobile sector growth in December, as total vehicle sales in India fell by its sharpest in 16 years, by 18.66%.

According to the industry analysts, the demonetisation initiative has generated weak sentiments amongst the domestic consumers, resulting in the industry’s weakest automobile sales since December 2000.

Last month, automakers sold 12,21,929 vehicles, comprising of passenger and commercial vehicles as well as two and three-wheelers. In December 2000, total automobile sales were down 21.81%, according to data released by the Society of Indian Automobile Manufacturers.

The only vehicle segment that registered a positive growth in December was light commercial vehicles (LCVs), which grew 1.15%, said Vishnu Mathur, Director General, SIAM.

Mathur, however, remains optimistic that the drop in automobile sales is only temporary, and the sales will pick up again following the announcement of Annual Budget 2017 on February 1.

"How sales pick up would depend a lot on what steps the budget comes up with to boost consumer sentiment and to increase disposable income, while improving the overall economy," he said.

Passenger cars sales in December fell 8.14%, maximum since April 2014 when it registered a 10.15% drop, to 1,58,617 units. Overall passenger vehicles sales dropped 1.36% to 2,27,824 units. Commercial vehicles sales, meanwhile, fell 5% to 53,966 units.
The Dollar Business Bureau - Jan 11, 2017 12:00 IST