Ujjain: Second-hand auto industry yet to recover from demonetisation blues

Ujjain:  Demonetisation has dealt a fatal blow to fledgling second-hand automobile market in India. Several small players have been thrown out of business. Only big players have managed to survive the note ban but with severe scars. Before demonetisation, industry was growing at the rate of 15%. The ouster of small players in post note-ban scenario had given an impetus to online sale of used automobiles.

The Free Press Journal talked to some people dealing in used vehicles in Ujjain to get a hang of the market. Jain Motors owner Sanjay Jain said that he joined the industry in 1990s and by 1997 was selling approximately 10 cars per month. He witnessed a steady growth and in 2015-16 was selling around 35 cars per month. However, note ban has made a severe dent in his business. “I am back to square one. I am selling merely eight to 10 cars per month,” he rued.

He also discussed the new tax imposed by the Madhya Pradesh government. The state government has levied 1% green tax on purchase of every vehicle irrespective of whether it is a new one or old. The new tax is a deadly blow to the industry that has been reeling under the adverse affect of demonetisation.

He further said that business of used car is directly connected to other small and big industry. RTO agents, labourer, security guard, mechanics and other service providers too have suffered along with second-hand car market.

Owner of Navkar Sales said that the market was hit hard by the demonetisation. However, it is now in a recovery mode. December was a zero sale month, he said and added that now the market is pulling itself out of the rut. However, the recovery process is quite slow.

He further said that following demonetisation, all payments are being done through cheques thus ruling out possibility of black money. Like used car, used twowheelers market has also hit all time low due to demonetisation. It is still struggling to get back to promising statistics. Farmers make a big customer group for used two wheelers market. With farmers struck hard and with very little cash in hand, sales have plummeted to an all time low, said Raees Mev, a dealer in used two wheeler markets.

Vikram Singh, a farmer from Kala Pipliya village, said he needs to buy a bike, his budget permits him to consider used bike but with lots of payment still due and a limit on the withdrawal of cash from bank, it is not possible in near future for him to buy a bike. With many like him, the used car market will take a little while to recover and start experiencing steady growth.

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