Auto sales plunge most in 16 years
Fall in December is a whopping 18.66%
Demonetisation has hit the Indian automobile industry, the fifth largest in the world, hard with monthly automobile sales plummeting to its lowest in 16 years in December, as total vehicles sales in the country fell a whopping 18.66 per cent.
Most of the major automobile segments such as scooters, motorcycles and cars saw record fall in Dece­mber sales as the auto sector continued to bear the brunt of negative sentiments in the wake of ban on Rs 500 and Rs 1,000 notes announced by PM Narendra Modi on November 8 last year.
Siam on Tuesday said vehicle sales across categories posted a decline of 18.66 per cent last month at 12,21,929 units, down from 15,02,314 units sold by manufacturers in December 2015. Sales of passenger cars dropped by 8.14 per cent to 158,617 un­its lst month, down from 172,671 sold in the year ago period. It was the lowest rate since April 2014 when sales declined by 10.15 per cent.
“This is the highest dec­l­ine across all categories sin­ce December 2000, when the auto industry reported a 21.81 per cent drop in sal­es,” Vishnu Mathur, director general at Siam, told Financial Chronicle. It is mainly on account of the prevalent negative sentiment in the market due to demonetisation that took toll on the auto industry, he pointed.
“Barring the light comm­e­rcial vehicles segment, wh­ich saw a growth of 1.15 per cent at 31,178 units in December against 30,823 units last year, all the other categories saw decline in sales in December,” Mathur said.
But he downplayed the drop in sales as temporary phenomenon. “The autosales pickup would depend a lot on how the budget comes up with steps to boost consumer sentiments and increase disposable income besides improving the overall economy,” Mathur said.
Michael Gonsalves