Automobile sales, affected by demonetisation curbs, fell by 18.61% across segments in December, the lowest rate of growth since December 2000, when they had dipped by 21.81%, according to data from the Society of Indian Automobile Manufacturers. The report, released on Tuesday, is significant as automobile sales are seen an indicator of economic activity. Sales only in the light commercial vehicle segment grew by 1.15%.
Domestic car sales sank 8.14% to 1,58,617 units in December 2016, against 1,72,671 units in December 2015, the report said. The society’s director general, Vishnu Mathur, told Mint, “Demonetisation has had its impact on the industry, though we feel it is a temporary phase.”
Sales of two-wheelers and three-wheelers were hit the hardest, particularly in rural areas, with drops of 22.04% and 36.23%, respectively. These vehicles are mostly paid for in cash.
Mathur said, “How sales pick up would depend a lot on what steps the Budget comes up with to boost consumer sentiment and to increase disposable income, while improving the overall economy,” according to The Economic Times.