Go Back   Team-BHP > BHP India > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 26th November 2016, 22:40   #136
Distinguished - BHPian
 
RavenAvi's Avatar
 
Join Date: Jun 2011
Location: Flying Around
Posts: 4,116
Thanked: 16,565 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Amidst the slump in demand for automobiles, the auto industry has started to cut down on regular production of it's models.

Being referred as "rationalising" or "correction" of factory production and dealer inventories, some companies have also started observing "no-production" days to maintain a balance with the slowdown in demand.

Quote:
Few companies were willing to talk on record over the matter, but officials said in private that “things are getting increasingly difficult” after the ban on Rs 500 and Rs 1,000 notes that came into effect from November 8. Officials at top manufacturers such as Maruti Suzuki and Hyundai did not confirm a slowdown in output, though retailers for these brands have spoken about a “massive squeeze” in demand.

Industry sources said companies and dealers are “not willing to take a chance” towards the end of the year and thus retail outlets are not being loaded with heavy inventories. “With the new year set to begin in about a month, dealers are not willing to be saddled with inventory of 2016. Companies are paying heed to their demand and adjusting output and stock levels.”

Component suppliers have already been briefed about the situation and many of them have started adjusting production schedules. “The supply crunch is severe, and at least this quarter will be hit badly. Things should look up from the new year as the cash flow gets normal.”
RavenAvi is offline   (4) Thanks Reply With Quote
Old 26th November 2016, 23:10   #137
Distinguished - BHPian
 
smartcat's Avatar
 
Join Date: Jun 2007
Location: Bangalore
Posts: 2,254
Thanked: 4,837 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

From the ET Auto article:

Quote:
“The after-sales market for components is down by 60-70% in northern India. The situation is not healthy,” a top industry executive said.
That is much steeper than new car sales demand drop. Isn't the spare parts demand supposed to be inelastic?

Not related to cars as such, but Kishore Biyani was pretty smug that Big Bazaar sales have jumped 20% since demonetization (because Big Bazaar accepts credit/debit cards and neighborhood shops don't)
smartcat is online now   (3) Thanks Reply With Quote
Old 26th November 2016, 23:31   #138
BHPian
 
stanjohn123's Avatar
 
Join Date: Oct 2008
Location: TN 75
Posts: 997
Thanked: 291 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Quote:
Originally Posted by VKumar View Post
Okay guys, what will you have to say if I just reveal that, "I saw a 2015 Fortuner A/T 4x2 selling off for 30 lac, all in demonetized cash"?
What an idiot. Why didn't he pay his taxes properly ? He could have bought a 2016 Fortuner if he was honest
stanjohn123 is offline   (1) Thanks Reply With Quote
Old 26th November 2016, 23:42   #139
Newbie
 
Ruchir031's Avatar
 
Join Date: Nov 2016
Location: New Delhi
Posts: 19
Thanked: 22 Times
Default

Quote:
Originally Posted by VKumar View Post
Okay guys, what will you have to say if I just reveal that, "I saw a 2015 Fortuner A/T 4x2 selling off for 30 lac, all in demonetized cash"?
Someone in my neighborhood sold off his 2013 A3 for 38 lakhs in old currency.
Ruchir031 is online now   Reply With Quote
Old 27th November 2016, 06:57   #140
BHPian
 
VKumar's Avatar
 
Join Date: Nov 2016
Location: NCR
Posts: 55
Thanked: 114 Times
Talking Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Quote:
Originally Posted by stanjohn123 View Post
What an idiot. Why didn't he pay his taxes properly ? He could have bought a 2016 Fortuner if he was honest
Maybe the tax amount on total money the person has is way higher than the price of even a new Montero. In such a case, adjusting the money this way is also a profitable deal for any such person.
VKumar is offline   Reply With Quote
Old 27th November 2016, 22:28   #141
Distinguished - BHPian
 
smartcat's Avatar
 
Join Date: Jun 2007
Location: Bangalore
Posts: 2,254
Thanked: 4,837 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Found the answer to my question.
http://scroll.in/article/822419/thei...t-wont-show-it

Quote:
For instance, the proliferation of automobile companies has depressed the market of spare parts for cars. Automobile behemoths offer warranties for two to three years, and credit finance has people replace their older cars instead of repairing and refitting them as was the dominant practice even a decade or so ago.

Delhi’s Kashmiri Gate market deals in automobile spare parts. On the day this correspondent went there, it wore a deserted look but for the long queues at banks. Tucked inside an alley, surrounded by his idle staff, a wholesale dealer said, “Most of our customers come from Rajasthan, Haryana, and Punjab, where the market for second-hand cars still flourishes. They are not part of the cashless economy.”

He cited the hypothetical example of a car dealer in Karnal, Haryana, who secures spare parts from Delhi through a supplier. “The supplier takes a cut of 1% or 2%,” the Delhi-based wholesale dealer explained. “If the dealer does not deal in cash, he will be run out of business.”

The wholesale dealer paused and said, “Can’t Modi see that demonetisation will ruin the grey market in every sector?”
smartcat is online now   Reply With Quote
Old 27th November 2016, 23:50   #142
BHPian
 
Born 2 Be Wild's Avatar
 
Join Date: Apr 2008
Location: DILLI
Posts: 372
Thanked: 117 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Quote:
Originally Posted by smartcat View Post
Well on a very different note and well a hands on one at that , i beg to differ dear sir..
The car after sales market or the car repair market is flourishing as it used to i run a workshop at my premises and business is as it was before demonitezation we did 2, clutches a blown head gasket and 6 services today which is routine for a sunday considering we are a small set up.!

I went to pick up spares from the local market in our area where most of the mechanics are, the place was chock a block not an iota of space,cars every where i checked with a few known guys on hows business and they were like "not as bad as we thought " someone who has to get his car repaired or serviced will do so as its essential.! Yes the after market accessory business is suffering sales are down there. But running repairs are routine just like earliar.
Born 2 Be Wild is offline   (1) Thanks Reply With Quote
Old 28th November 2016, 09:15   #143
Senior - BHPian
 
Join Date: Dec 2010
Location: --
Posts: 7,794
Thanked: 10,692 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Auto sales to take longer to reach normalcy -Showroom footfalls and vehicle sales had dropped as much as 80% and 50%, respectively. Manufacturers tweak their production to sync with lower demand.

Name:  55658808.jpg
Views: 1983
Size:  50.5 KB

Link
volkman10 is offline   (3) Thanks Reply With Quote
Old 28th November 2016, 13:57   #144
BHPian
 
discoverwild's Avatar
 
Join Date: May 2009
Location: Coimbatore
Posts: 529
Thanked: 433 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

A friend booked a Baleno for his wife last month. Was given a waiting period of 6 months. Now, the sales rep is behind him for the cheque since the last week, saying it's available. I think this is going to be a huge hit for November and December sales.
discoverwild is offline   (1) Thanks Reply With Quote
Old 29th November 2016, 09:04   #145
Senior - BHPian
 
Join Date: Dec 2010
Location: --
Posts: 7,794
Thanked: 10,692 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Demonetisation - Now, automotive companies resort to partial shutdown

With the government announcing the demonitisation of high value currencies, auto demand drops - in some cases the drop is a significant 65% - forcing automotive companies to realign production to avoid inventory pile at the end of the year.

Quote:
AUTOMOBILES: Life in the slow lane

POSITIVE IMPACT: Interest rate and tax cuts soon

NEGATIVE IMPACT: Fall in sales of two-wheelers, commercial vehicles and luxury cars

NUMBER GAME: In November, utility vehicles sales expected to be down 40-50%, commercial vehicle sales down by 50-60% and two-wheelers 20-40%
Quote:
Daimler has gone in for block leave (no production days) for three days last week and has planned a similar exercise this week, While Renault and Nissan factories in Oragadam is stopping production of cars on the third shift. Several other manufacturers are slowing the car output, without reducing shifts
Quote:
RC Bhargava, chairman of Maruti Suzuki, the country’s largest car maker, however sees this as a blip. The impact on small car sales may be minimal as most of the transactions occur through bank financing or loans. We have advance bookings and the waiting period for several models which will help us tide through this phase.
Link

Link1

Last edited by volkman10 : 29th November 2016 at 09:26.
volkman10 is offline   (1) Thanks Reply With Quote
Old 29th November 2016, 10:43   #146
Distinguished - BHPian
 
sgiitk's Avatar
 
Join Date: Dec 2007
Location: Kanpur
Posts: 6,639
Thanked: 3,056 Times
Infractions: 0/1 (4)
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Quote:
Originally Posted by volkman10 View Post
Demonetisation - Now, automotive companies resort to partial shutdown

With the government announcing the demonitisation of high value currencies, auto demand drops - in some cases the drop is a significant 65% - forcing automotive companies to realign production to avoid inventory pile at the end of the year.
I was quite foxed by the reduction in footfalls in car showrooms. I was at a loss to understand that how can car sales be affected by the lack of cash. Then I was told by a bank manager that many people bought car on finance, and then payed off the installments in 'cash', in under the table. They paid off under a year. This may be a clue for out taxmen to probe car deals on 'finance' which were paid off very early.
sgiitk is offline   (6) Thanks Reply With Quote
Old 29th November 2016, 12:31   #147
BHPian
 
car_crazy1400's Avatar
 
Join Date: Feb 2005
Location: DL/UP16/PB10
Posts: 478
Thanked: 125 Times
Default

I went with my Mercedes for a prescheduled air filter replacement yesterday.

The showroom was empty beside the staff. Though they were preparing two SUV's for delivery, still looked gloomy. The services counter was also not as busy but they had regular work, lots of cars.

I also went to the Audi showroom next door. It was literally deserted. Just two sales personnel and minimal lighting on.
Both the sales people agreed that the footfall is down by upto 70% in both showrooms. And its nearly year end so no growing business.

One of the services advisors joked that Modi government has given the regular people a 'chai ka kullar' and everyone is in lines for cash.
But everyone I met is upbeat about things getting better.
car_crazy1400 is offline   (1) Thanks Reply With Quote
Old 29th November 2016, 12:44   #148
BHPian
 
400notout's Avatar
 
Join Date: Mar 2013
Location: Navi Mumbai
Posts: 105
Thanked: 179 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Quote:
Originally Posted by sgiitk View Post
I was quite foxed by the reduction in footfalls in car showrooms.
Believe it or not the economy is heading for a slowdown. It makes more sense to avoid superficial expenses . Buying makes sense now if the car is urgently required, upgrades and second cars would definitely undergo reconsideration for some.

Last edited by 400notout : 29th November 2016 at 12:55. Reason: grammar
400notout is offline   (2) Thanks Reply With Quote
Old 29th November 2016, 14:32   #149
BHPian
 
Join Date: Jul 2015
Location: Coimbatore
Posts: 647
Thanked: 779 Times
Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Quote:
Originally Posted by 400notout View Post
Believe it or not the economy is heading for a slowdown. It makes more sense to avoid superficial expenses . Buying makes sense now if the car is urgently required, upgrades and second cars would definitely undergo reconsideration for some.

It appears that the economy would slowdown - because all the black money has gone down the drain now, and they have to figure out fresh ways to recreate their unaccounted wealth. It is more easier to buy bigger cars using cash evading tax. You get 30% bigger cars, right?

However, note that the deposits are bound to increase now, and hence the interest rates including the car loan rates will fall. This should boost the sales of regular cars.

Various sectors where black money had kept the sales and prices up for a long time will now face a slump, and hence there will be some job losses in such places. So, like you said, it is better to cut superficial expenses (as it should be always!) and save.
Many middle class people who were paying tax honestly were trying to compete with the rich neighbours and relatives who display their unaccounted wealth in the form of gold, cars, etc in vain. Now these middle classes can breath easier, because there will not be any such need hereafter.
hybridpetrol is offline   (3) Thanks Reply With Quote
Old 29th November 2016, 14:37   #150
BHPian
 
pixantz's Avatar
 
Join Date: Dec 2013
Location: Mumbai
Posts: 363
Thanked: 370 Times
Default

If footfalls at car showrooms to buy new cars has dropped considerably after black money is choked, that means that car sales was directly linked to having black money which drove the same. Also, that means that the unnecessary high traffic congestion and resulting pollution and other bad situations were also a result of black money? Because logically, this means that people with white money do not account for that many of the access of cars on the road.

Am I even remotely correct or am I missing some part of the logic?

And if I'm on the right track then thre are many other negative things around us, in India, that is the direct result of black money? I'm excited already
pixantz is offline   (2) Thanks Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Your reaction to the Sun Film Verdict? EDIT - Ban in effect post 25th July judgement man_and_machine The Indian Car Scene 661 16th October 2012 23:14
Fake/ Counterfiet Rs. 1000 note - Important Alert from RBI muralisk Shifting gears 5 25th June 2009 10:03
NANO effect and EURO effect in Small Car market allwheeldrive The Indian Car Scene 8 15th June 2009 22:29
Engine Swap for Maruti 1000 - points to note slipstream Modifications & Accessories 8 17th April 2007 12:44


All times are GMT +5.5. The time now is 14:13.

Copyright ©2000 - 2016, Team-BHP.com
Proudly powered by E2E Networks