After dangal with demonetization, 100% auto loans to fuel sales

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26 Aug, 2025 12:21

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Dhirendra TripathiMoneycontrol Patparganj Industrial Estate in eastern part of the national capital is home to scores of family-run, small and medium proprietary businesses. Car dealership is one of them. A vehicle manufacturer not having a dealer here is an exception. It’s 4 pm and December is drawing to a close. The last month of the year isn’t the same anymore in Delhi. The day is sunnier than usual and warmer as well. The deadline for the most debated and dissected subject in the country for over a month and a half – demonetization – is coming to a close. Outside the dealer showrooms, the missing chill in the air and the chill in business activity are both palpable. But step inside, the mood isn’t so sombre. The lull has given way to cautious optimism -- new normal being set, fresh paradigms being shaped. At some of them, life is actually business as usual. Prashant Khattar, senior sales consultant at Bagga Link Motors Ltd, one of the largest dealers of Maruti Suzuki India Ltd, can't help feeling a bit smug. His showroom was bustling with customers when this correspondent went to meet him.When asked how the sales are as the year and demonetization come to a close, he says, “Aap khud hee dekh lo. Kuchh fark padaa hai kya?” (See for yourself. Has it made a difference?) When pressed, he admits December sales have been affected but not more than 5-10 percent, but insists things are getting back to normal faster than he had anticipated. But then, the stuff Khattar sells has lorded over more than half the passenger car market for years now. The gradient of decline in December sales is a bit steeper when Rajkumar Sharma, manager of sales and operations at Renault dealer Avia Auto Services Pvt Ltd, gets talking. Sharma shares some interesting insights about changing dynamics of car sales and financing post demonetisation. “Most people are now going for finance option," Sharma tells moneycontrol.com."Let’s say if 30-40 people out of 100 were opting for finance earlier, as many as 70 are now going for it,” he says, adding that December sales could be down by as much as 20 percent from last year but life is getting back to normal. Both Khattar and Sharma say the impact of demonetization was most felt till December 15-20 after which queries started converting into sales. “Cash is totally out now”, says Sharma, a view shared by O. P. Mishra, assistant manager of sales at Uttam Toyota. “Everybody is now going for finance with very few choosing cheque or an online option. People are now scared that making any down payment, even if it is cheque, could attract scrutiny of the income tax department,” Sharma says. He says private sector banks were earlier financing 85-90 percent of the vehicle’s ex-showroom price but were now giving 100 percent finance for on-road price. Khattar says while banks were now willing to fully finance government and public sector employees, Form 16 reflecting a salary income of Rs. 500,000 is what was needed for a private sector person to get 100% finance. “We are giving 100 percent finance to government and public sector staff and 85 percent to private. In any case, we ask for a CIBIL score of 700,” says the branch manager at State Bank of India’s premium branch in Shreshtha Vihar. Talk to Deepak Pathak, sales manager at Mahindra & Mahindra dealer Shiva Auto Car (I) Pvt Ltd, and he makes you jog your memory. “We are actually better off from last year. Remember the National Green Tribunal order banning diesel vehicles of over 2000 cc? ” he asks.  Both M&M and Toyota have portfolios skewed towards diesel. Shivraj Singh, customer advisor at Patparganj outlet of Tata Motors Ltd’s subsidiary Concorde Motors India Ltd, says overall December sales could suffer as much as 20percent but the mood is positive again. So it is at Asco Motors, a dealer for Royal Enfield motorcycles, where the sales representative says the worst is over. The same is not as much shared by Vivek Pandey, branch in-charge at G. K. Motors Pvt Ltd, a dealer of TVS Motor Company Ltd. Pandey wears a glum look. Sales at his TVS outlet -- away from the industrial estate -- used to number around 50 units per month. He says they are down to 30 since the November 8 enforcement of demonetization. It’s 6 in the evening but no sight of any prospective customer is seen. The staff at Sunrise Autoworld Pvt Ltd, a dealer for Hyundai Motors India Ltd, is too busy. They offer water, tea and coffee as small mercies but their officials have little time to talk, engaged as they are with prospective buyers. The buzz is slowly getting back here too. “Commercial vehicles like Indigo and Indica are selling more where only Rs. 50,000 payment has to be made and the rest is all financed,” Singh says. His statement could be a reflection of the slow but fundamental shift in the automobile industry -- think Ola and Uber. That’s a bigger demon than demonetization!