Two Wheeler, Commercial Vehicle Sales Worst Hit After Note Ban

Two-wheeler sales fell nearly 6 percent due to demonetisation, says Society of Indian Automobile Manufacturers.

Passenger vehicle sales in India inched up 1.82 percent in November, the lowest clip since February this year, even as two-wheeler sales fell nearly 6 percent as currency pullback affected sales, especially in rural areas.

According to Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales last month were at 2,40,979 units, as against 2,36,664 in November last year.

Domestic car sales ticked up to 1,73,606 units as against 1,73,111 in November last year while that of commercial vehicles (CVs) was down 11.58 per cent at 45,773 units in November, SIAM said.

Vehicle sales across categories registered a decline of 5.48 percent at 15,63,665 units, from 16,54,407 in November 2015. It is the steepest decline in 43 months when total sales had declined by 7.75 percent in March 2013.

“In November, companies were able to push stock to dealers as the inventory levels were down owing to a good festive season in October. So, the impact is not visible at wholesale levels. It will be only clear after this month after taking into account retail sales,” SIAM Director General Vishnu Mathur told reporters here.

Over 85 percent of the passenger vehicles are financed.

So, people are just postponing buys while the impact is visible in rural areas, especially in the two-wheeler space, where cash component pays a major role, he added.

“So, two-wheeler sales are giving out a true picture of the current situation. Also, for car companies which have long waiting periods for some of their models, the impact would be less as compared to others which do not have any backlog to clear,” Mathur explained.

Even fast-growing utility vehicles sales posted 10.01 per cent growth during the last month, the lowest pace in the past 10 months.

However, in April-November, total vehicle sales across categories grew 12.5 percent at 1,54,20,035 units as against 1,37,07,157 in the year-ago period.

Mathur said footfalls declined at showrooms during the first week after demonetisation, but situation recovered in the weeks that followed.