The government’s move to demonetise old Rs. 500 and Rs. 1,000 notes has taken a toll on consumer demand with nearly all industries witnessing a sharp decline in sales.
According to a research by Brickworks Media, powered by Chrome Data Analytics and Media, consumers are postponing purchases, particularly for consumer durable and auto sectors.
Sample size
The insights, the market research firm said, are based on a sample size of 30,000 respondents across the country, with 15,000 respondents from rural areas. The research was conducted between November 15 and 23.
“Every sector has seen a dip in demand, led by fall in auto sale in rural areas due to decline in cash transactions … but the good thing is people are now forced to move to digital, so every transaction that happens is recorded,” said Pankaj Krishna, Founder and CEO, Chrome Data Analytics and Media.
Appeal to Jaitley
Last Saturday, at a meeting with Finance Minister Arun Jaitley, industry captains red-flagged an over 30 per cent deceleration in demand across sectors since the November 8 demonetisation announcement and urged the government to remonetise the economy soon by bringing more new Rs. 500 notes into circulation. They also sought a stimulus package of sorts, including a cut in personal and corporate tax rates, to offset demonetisation’s negative impact on job creation and economic growth in the coming quarters.
Auto sales figures for November were a mixed bag, but auto-makers raised concerns over “short-term headwinds” due to “immediate disruption and uncertainty” brought about by demonetisation. The move has impacted customer walk-ins at dealerships, order bookings and timely deliveries. November sales figures, analysts said, don’t reflect the ground reality of retail sales as they only reflect transfers from manufacturing plants to dealers.
Abdul Majeed, Partner at Price Waterhouse, said, “Demonetisation will have significant negative impact at least in the next two to three months across the board in the automotive sector, especially two-wheelers, SUV, luxury vehicles and commercial vehicles.”
