Demonetisation halts auto sector growth, sales decline in Nov

Demonetisation halts auto sector growth, sales decline in Nov

Around 1.56 million units were sold in the domestic market in November

The Dollar Business Bureau

The demonetisation has affected almost every sector in the country. The rapidly-growing automobile sector in India has witnessed a drop of around 5% in the month of November, the first in this year. 

All the vehicle segments posted a decline, be it commercial vehicles, two-wheelers, or three-wheelers. This was the sharpest decline in the past 3.5 years. The sector had last witnessed a drop of 7.75% in March 2013. However, in December 2015, the sector posted a drop, when the volumes declined by just 0.17%. 

According to the data by Society of Indian Automobile Manufacturers (SIAM), around 1.56 million units of vehicles were sold in the local market in November, a drop of 5.48% compared to 1.65 million units in the same month last year. 

Apart from the passenger vehicles, all the segments of automobile industry recorded a decline. Two-wheelers segment, the biggest in terms of volume, fell for the first time in the current fiscal, after posting a double-digit growth for several months. 

Within the two-wheelers segment, motorcycles were severely affected and posted a drop of more than 10%. In scooters, there is a decline of around 2%, a reverse trend after 3.5 years of growth. 

Other major segments of the industry also reported a double-digit decline in dispatches in November. Sales of medium and heavy commercial vehicles declined over 13% while light commercial vehicles posted a drop of over 10%. Three wheelers posted a first decline in more than 12 months and drop 26% in the last month. 

However, passenger vehicles performed better compared to the rest of segments. But the growth of just 1.82% was the lowest in the past few months. 

The Dollar Business Bureau - Dec 09, 2016 12:00 IST