The government’s demonetisation exercise has brought the automobile industry growth to a screeching halt, and carmakers now estimate the growth rate to halve year-on-year to around 4 per cent in 2017. Just a couple of months ago, carmakers were hopeful of double-digit growth this calendar year after a good festive season.
“Demonetisation has brought in structural and fundamental changes in financial markets affecting the buying process. It will take some more time for sentiments to normalise. Given the current challenges, the market is likely to grow by 3-4 per cent in 2017,” said Rakesh Srivastava, Senior Vice-President (sales & marketing) at Hyundai Motor India (HMIL).
Sales of passenger vehicles have grown by around 7 per cent to little less than 3 million units in 2016. Passenger vehicle sales in the domestic market grew by a strong 11 per cent to 1,774,716 units between April and October 2016, before slowing to 1.82 per cent in November. Passenger vehicle sales last month are estimated to have dropped by 1.7 per cent to 226,539 units compared to 230,364 units sold in December 2015.
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