[SAE40 in veins]

Just two cents.

While many have explained the rationale and logic behind these monetary measures, as auto enthusiasts it might do well to look at it through the prism of an auto buff. I for one feels that the sectors which will be affected are the expensive liquor dens, massage parlours and spas, real estate sector et al. If we look at the kind of vehicles used by these categories of people who frequent these places, it may well be interesting to note that the Innova crowd is actually more prominent than the Fortuner crowd. The fortuner guy actually has his sophistication and most likely knows how to invest his stuff than hoard it.

If we look specifically at the Innova crowd, it will be interesting to see that many travelers in white board Innovas actually do not own the vehicles themselves but the vehicles may actually be registered under the name of some trust or organization. Innova users (not buyers) prefer the vehicle for the rear seat comfort and also the fact that it actually possesses an upper middle class image than that of an 'Elite' even though the one who sits in the middle captain seat might be an Elite in the true sense. Crysta brings out the fact that even an overpriced vehicle can sell well as the vehicle can pass off as the local amiable neta's vehicle whereas Fortuner/Endeavor etc creates the impression of the 'Shark' and 'Elite' in the minds of the common man.

White scorpios and Boleros to a certain extent do carry the same image and definitely the Thar. So if sales are to go down, i would count the Innova as a larger victim than the Fortuner in the Indian scheme of things. Fortner going through a generation change exactly at this point would mean that it still will have some interest from people due to the novelty factor. Among manufacturers, i would expect Mahindra and Toyota to be hit harder than the others due to the nature of the crowd which uses them but at the same time, the real continuing effect will be seen only after a few months when the present backlog of fully paid up and loan sanctioned bookings pass the pipeline maybe Jan, Feb 2017 would be a good indicator of how things will turn out.

[Sawyer]

Originally Posted by capslock

Thanks for your reply. As of now the vehicle is still on my name & all the paperwork is pending. So, if we issue a receipt and get a signed delivery note then we can show it as a proof? I am sorry but I am really dumb in tax & money matters
FYI The new owner is a family friend.

Not to worry; I sold my two wheeler a couple of days after the event, and got the proceeds in old notes.
I have an acknowledgement of a letter I wrote without any backdating, to the buyer, advising him of sale of the vehicle, for the value received, with a copy of his drivers license. Because the amount was less than a lakh, I did not bother to take his PAN details. And because even with that transaction, my total bank deposits would not cross Rs 1.5 lakhs. I would have behaved this way, even if the demonetisation would not have happened.
If the amount was to exceed Rs 2.5 lakhs, I would have taken a copy of the PAN card as well.
I still have to deposit the money, I will wait till the mad rush subsides.
Honest folk really have nothing to lose sleep over.

[Passiautonate]

Originally Posted by Sawyer

Not to worry; I sold my two wheeler a couple of days after the event, and got the proceeds in old notes.
I have an acknowledgement of a letter I wrote without any backdating, to the buyer, advising him of sale of the vehicle, for the value received, with a copy of his drivers license. Because the amount was less than a lakh, I did not bother to take his PAN details. And because even with that transaction, my total bank deposits would not cross Rs 1.5 lakhs. I would have behaved this way, even if the demonetisation would not have happened.
If the amount was to exceed Rs 2.5 lakhs, I would have taken a copy of the PAN card as well.
I still have to deposit the money, I will wait till the mad rush subsides.
Honest folk really have nothing to lose sleep over.

Don't mind but vehicle value depreciate 20% per year as per accounting books and current tax laws. You are liable to pay the capital gain tax or declare capital loss basis 20% depreciation. Well nobody going to come and check on that but yes this is law

Apologies for going bit O.T and nothing against anyone. Just describing the course as per best of my understanding.

[vinit.merchant]

Originally Posted by Passiautonate

Don't mind but vehicle value depreciate 20% per year as per accounting books and current tax laws. You are liable to pay the capital gain tax or declare capital loss basis 20% depreciation. Well nobody going to come and check on that but yes this is law

Apologies for going bit O.T and nothing against anyone. Just describing the course as per best of my understanding.

That way of calculation would be correct in case the vehicle was registered in the name of a company/firm and the said firm claimed depreciation as a cost in its P&L. Sale value over and above the depreciated value of the asset, in this case, will be considered as an income (and not as capital gains)

For an individual, all this is irrelevant as he does not claim any depreciation as a deduction from his taxable personal income.

[volkman10]

Buying cars no more a priority - immediate effect of demonitisation!

But Marurti Suzuki seems to be impacted lesser,

Maruti Suzuki however has said that the effect of Demonitisation would be negligible as almost 75 per cent of the sales are through loans for both new and used Maruti cars.

Manufacturers also claim that sales of new cars could drop by as much as 50 per cent till the cash situation is brought under control. Speaking to used car dealers, the situation is pretty grim. According to them enquiries have gone down by almost 80 per cent with almost everyone thinking about withdrawing money with no one thinking about buying a car. And even if they do, it’s with the old cash which is useless for the dealer.

Luxury car manufacturers are dissuading people from making purchases with cash since it gets difficult for them to handle the cash as well.

link

[RavenAvi]

According to a report on ET Auto, bookings for new vehicles have dropped by almost 40-50%, while sales have dropped by 60-80% across the 2-wheeler and 4-wheeler segments.

Even the used vehicle market sees a significant drop in the past one week. Customers are also staying away from servicing their two-wheelers, points out a 2-wheeler dealership's general manager.

“The market has totally changed. Almost 60 per cent of the enquiries have vanished. After the currency change announcement, people are standing in banks and ATMs. There are restrictions on withdrawals due to which there is an impact on the car segment as well. I think the impact will be felt till the end of November,” observed Sanni Babu, general manager of a four-wheeler showroom.

He said while car sales have dropped by almost 80 per cent in the last one week, even those who paid the initial amount have not gone forward with the purchase as loans are not being disbursed now. Pointing out that almost 80 per cent of the customers depend on financial loans, he said they have to pay some margin money in cash due to which there is an impact. Also, he said that many banks are not processing loans as they are busy in exchange of currency.

[vinit.merchant]

Originally Posted by volkman10

Buying cars no more a priority - immediate effect of demonitisation!

But Marurti Suzuki seems to be impacted lesser,

Originally Posted by RavenAvi

According to bookings for new vehicles have dropped by almost 40-50%, while sales have dropped by 60-80% across the 2-wheeler and 4-wheeler segments.

A colleague had booked a Baleno with a waiting of 19 weeks, 14 weeks were still left, when he suddenly got a call from Nexa yesterday. Car is available for allocation (due to cancellation) and he can have it if he wants.

That shows the picture.

Though MS may not be impacted immediately since some of their cars have had waiting periods running in months, entire Auto industry is seeing a slump, that too during the end of the year.

Those looking for buying a car (used/new), now is the time to get the bargain you were looking for.

[Sawyer]

A friend that has booked the new Innova with a 6 month wait list, has just been told that his car is ready.

This looks very bad; I expect a stock market crash next.

[pixantz]

I guess rhe Fortuner will be hit even worse. I heard there used to be a lot of cash buying in the Fortuner scenario. That's not bound to happen now.... Not a good start for the big boy SUV.

[SchumiFan]

Originally Posted by Sawyer

A friend that has booked the new Innova with a 6 month wait list, has just been told that his car is ready.

This looks very bad; I expect a stock market crash next.

If people were paying for these purchases with money that they shouldn't have in the first place, then by all means let it slow down.

Although they have had to provide PAN for 10L+ purchases for some time now. Wondering how this has affected purchases.

[west]

Originally Posted by SchumiFan

If people were paying for these purchases with money that they shouldn't have in the first place, then by all means let it slow down.

Although they have had to provide PAN for 10L+ purchases for some time now. Wondering how this has affected purchases.

You might be right, but think about manufacturers stocking cars.Do you want them to go bankrupt. Even dealers stocking stuff against loans, They can't hold more than 3-4 months if this continues.This is not about buying in cash ,loans or against pan Buyers sentiment and confusion on value of fixed assets and their future source of income expenditures and savings

[SchumiFan]

Originally Posted by west

You might be right, but think about manufacturers stocking cars.Do you want them to go bankrupt. Even dealers stocking stuff against loans, They can't hold more than 3-4 months if this continues.This is not about buying in cash ,loans or against pan Buyers sentiment and confusion on value of fixed assets and their future source of income expenditures and savings

Nobody is going bankrupt. Not especially Toyota who probably see most profit among the mainstream manufacturers.

We have seen companies going over time to produce cars for the consumers (2/3 shifts a day). It will probably get reduced to 1 shift and the waiting period will get nominal as well.

Will surely be interesting to see next month's sale data even if it is manufacturer dispatches.

[west]

Yes numbers should give a good insight, bankrupt, written off or loss is all associated with economic wastage.Lets see if sentiment continues and hope future is good for ALL but for now year ending cars should be discounted and will go up to march with creta doing 8000+ figures

[Sawyer]

Originally Posted by SchumiFan

If people were paying for these purchases with money that they shouldn't have in the first place, then by all means let it slow down.

Although they have had to provide PAN for 10L+ purchases for some time now. Wondering how this has affected purchases.

By all means may include a reduction in GDP growth, deflation and a long depression in general - it is not out of the bounds of possibility. And it will affect the poorer and the middle class as well; black money isn't all bad and is linked with the white economy intimately. Take for example the spending on weddings - the other side of spending by one is earning by another - by all the service providers to the wedding who will be the poorer if the spending is curtailed and their loss of earning will have its own downstream impact. Multiply this effect many times over and in many places and it can cause a lot of grief to a lot of people that aren't black wealth owners.

The Chinese have a saying - be careful what you wish for, you may just get it.

The PAN thing probably works this way - people were using the cash to fund the things that did not need PAN or cheques: living expenses, partying, holidaying and the like. And using white money for cars etc. Now there is less of black for the former, use of white instead, and less of white for the latter. Along with a general feeling of feeling a little poorer, so postponed discretionary expenditure.

[serious_maniac]

For the honest buyer - majorly salaried people, wait for some tax cuts. With money being taken out of system, spending will slow. Government will try to stimulate the economy by rate cuts. Interest rates should come down and taxes as well. Used car market for luxury cars will see some nice deals.

~m