5 ways demonetisation has affected life on wheels

So it’s been two weeks and you’ve stood in queues outside banks more than outside temples. The two big notes are no more and everyone has started swiping cards now. What does the change mean for an enthusiast and how does it impact the automotive industry? Here are five changes we’ve seen –

1. Cheaper road trips:

The first thing I noticed as I passed a toll booth the first day after demonetization was the long queue. You waved a Rs 500 or a Rs 1000 note at the attendant and he’d argue a bit and let you go for free. And then the government made an announcement that toll booths will not charge you for the next three days. The news got sweeter with the no-toll fee rule extending to December 2, and we suspect another extension after that. If you drive from Mumbai to Delhi then, you could save around Rs 1500 per trip in a car and there have been reports that transportation companies are saving lakhs of rupees. So cheaper road trips and better for business. Round 1 to the Modi government!

2. Well planned trips:

This could be a good or a bad thing depending on how you plan your trips. We usually research a place, book our hotels online, pay fuel by card and eat at restaurants that accept plastic money. But that’s only on the regular and popular routes. If you’d be going somewhere in Leh-Ladakh, the North-East or even any place deeper into the country that’s away from the city, planning isn’t easy as most places aren’t available online and good luck showing your Mastercard to a dhabewala.

3. Decline in bookings and enquiries:

Compared to the average enquiries and bookings before demonetisation, the numbers in major cities like Gujarat, Punjab, and the North East region have been waning since then. The percentage of footfalls in showrooms for enquiries and bookings has deteriorated by 30 per cent according to Economic times. While enquiries have dropped, 100 per cent finance schemes for automobile companies are now being heavily advertised. The only problem for the auto industry is that the rural market is such a cash dominated economy that convincing them to take a loan on their next purchase is going to be tough.

4. Organised resale vehicles market:

The second hand market has also seen the drop in sales as cash transactions amount to a major chunk of the price in the largely unorganized sector. This could spell good news for the larger organized player in the market like Maruti True Value and Mahindra First Choice as they offer good finance options. It’s a good time to regularize this section of the auto industry.

5. Cash in the spare parts market:

For those on two wheels, we know you are facing tough times at workshops. Most small part replacements are bought in cash usually, and these amount to tens or a few hundred rupees. Most spare part stores only accept cash. Most don’t even hand you bills for these parts , so you know where the money gets washed. This could stop and there could be an increase in inventory at workshops soon, but till this happens, motorcyclists are in a bit of a fix.