[RavenAvi]

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.

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.”

ET Auto

[SmartCat]

From the ET Auto article:

“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)

[stanjohn123]

Originally Posted by VKumar

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

[Ruchir031]

Originally Posted by VKumar

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.

[VKumar]

Originally Posted by stanjohn123

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.

[SmartCat]

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

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?”

[Born 2 Be Wild]

Originally Posted by smartcat

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

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.

[volkman10]

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.



Link

[discoverwild]

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.

[volkman10]

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.

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%

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

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

[sgiitk]

Originally Posted by volkman10

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.

[car_crazy1400]

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.

[400notout]

Originally Posted by sgiitk

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.

[hybridpetrol]

Originally Posted by 400notout

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.

[pixantz]

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