Demonetisation impact: Mixed bag for auto sales in December

REFLECTING CHALLENGES faced by automobile industry in the wake of demonetisation, auto majors Hyundai Motor India, Mahindra & Mahindra and Ford India today reported decline in their domestic sales in December.

Other firms such as Tata Motors, Renault, Nissan and Volkswagen, however, reported increase in their Indian sales in December.

Hyundai Motor India Ltd (HMIL) said its domestic sales in December were at 40,057 units as against 41,861 units in the same month previous years, down 4.3 per cent.

HMIL Senior Vice-president, Sales and Marketing, Rakesh Srivastava had stated that demonetisation impacted consumer sentiment creating a challenge and walk-ins at showrooms were down by around 40 per cent while overall retail sales were down by 2425 per cent immediately after the note ban.

Retail sales had, however, picked up in December by 5 per cent as compared with the same month previous year, he said while adding it might take a quarter to normalise.

Mahindra & Mahindra’s sales in the domestic market were down 1.5 per cent to 34,310 units last month as compared to 34,839 in the year-ago period.

“The auto industry continues to go through challenging times, grappling with the short-term effects of demonetisation as well as reduced and postponed purchase decisions. However, we believe there will be a gradual pick-up in demand starting next few months,” M&M Chief Executive (auto division) Pravin Shah said in a statement.

Likewise, Ford India also saw its domestic sales dip by 6.04 per cent to 5,566 units last month as against 5,924 units in the same month a year ago.

“As we move in 2017, the industry does face some shortterm headwinds given the uncertainty regarding the impact of demonetisation and GST, while the medium to long term outlook continues to be positive,” Ford India Executive Director (Marketing, Sales & Service) Anurag Mehrotra said.