Thanks to Demonetization, Automobile production hits a 16 year low

The government’s decision to ban 500 and 1000 rupee notes has been more of a hassle in the recent times than it has been a gain. The long run benefits of demonetization are very much debatable but it has proved be a chaos in the last 2 months.

Also, demonetization has hit the automobile industry in India very hard with the cash crunch. The monthly growth rate sales in the country has hit a 16 year low in December 2016. Sales had declined by 18.66 percent in that period alone.

The data was revealed by Society of Indian Automobile Manufacturer (SIAM). Also according to these reports automobiles across all catergories sold 12,21,929 units in December compared to 15,02,314 units last year in December 2016. Only light commercial vehicles saw a 1.15 percent growth at 31,178 units sold.

The Director of SIAM, Vishnu Mathur explained the situation saying “This is the highest decline across all categories since December 2000 when there was a drop of 21.81 percent in sales. The reason is largely due to the negative consumer sentiment in the market due to demonetisation.”

Enthusiasts are still hoping that 2017 will be a much better year for the automobile industry with so many new announcements and products coming their way from Maruti, Honda, Hyundai, Yamaha and Bajaj.