It looks like the demonetisation of high-value currencies by India is all set to take a toll on vehicles sales in the country. According to Federation of Automobile Dealers Association (FADA), the footfall at the dealerships across India has slowed down by 75 percent and bookings have come down equally by about 50 percent so far.
FADA also hints November retail sales for passenger vehicles will be affected by 30 percent while the figure is expected to go down further in December if things don't improve, reports ET Auto. "The situation is even worst at the service centres because of the lack of cash at the counter. However, many a time the reason is not lack of cash at buyers end, but they (buyers) are either busy with other things that has crop up after currency ban or they are keeping the cash at hand for more important urgent things," said John K Paul, president of FADA.
"Impact on the car sales after demonetisation for Rs 500 and Rs 1000 notes is not unexpected. It has already dented the sales across the country. Be it is motorcycle segment, small cars or even luxury cars, customers are not going ahead with the decision to buy. They are waiting for the whole issue to settle down before any major spending" said Abdul Majeed, partner, PwC to International Business Times, India. "If things take takes longer duration to fix, recovery of the market is expected only by the end of this financial year," he added.
Sensing immediate dip in sales, automakers have already come up with offers and schemes to lure customers. Hyundai is offering 100 percent onroad price financing through HDFC, Kotak and Axis banks besides offering 100 percent funding on ex-showroom prices through ICICI Bank and some other banks. Similarly, Honda has tied up with HDFC Bank, Axis Bank and ICICI Bank to offer 100 percent financing for its vehicles. India's largest car maker Maruti Suzuki India Ltd. is offering zero down payment option to buyers.