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Demonetisation Effect: SIAM Data Reveals The Raise & Fall Of Automobile Sales In 2016

Written by : Tech Trends Team

The Indian automobile sector has sold a total number of 2,19,01,572 units across all segments and categories to record a growth of 9.17 per cent during 2016. However, the negative impact of demonetisation was seen in December's sales numbers, industry data showed by the Society of Indian Automobile Manufacturers (SIAM).

The data furnished the total sales of passenger vehicles, which include cars, utility vehicles and vans, rose by 7.01 per cent to 29,66,637 units in 2016. Coming to the two-wheeler sales, which include scooters, motorcycles and mopeds, increased by 9.70 per cent to 1,76,86,563 units. But, the overall sales across all categories receded by 18.66 per cent to 12,21,929 units in December, while the total passenger vehicle sales declined by 1.36 per cent to 2,27,824 units, Whereas the two-wheeler sales in the last month dwindled by 22.04 per cent to 9,10,235 units.

Commenting on sales numbers of December 2016, Abdul Majeed, Partner with Price Waterhouse, said, "The automotive industry has been impacted due to demonetisation, particularly in rural areas and regions where cash transactions are typically very high. Players with high volumes in the passenger car segment have reported a decline. OEMs (Original Equipment Manufacturers) with low volumes and those that are riding on the demand for new models, which involve a waiting period are relatively less impacted. Even some have reported growth."

According to Sridhar V, Partner, Grant Thornton India, stated that, “two-wheeler segment was most impacted in December 2016 due to demonetisation. One will have to hope that the demand in two-wheelers might pick up in the next few months in lieu of the BS-IV requirements from April 2017 to sustain the growth. This will determine if the year can end with an often quoted double-digit growth. However, I would keep my fingers crossed."

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