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Currency Scrappage: SUVs And Luxury Cars To Have An Impact From Demonetisation Of Rs 1000, Rs 500
The currency scrappage will have a consequential short-term impact on the sales of automobiles.
Prime
Minister
Narendra
Modi
announced
in
a
surprise
address
to
the
nation
that
from
today
currency
notes
of
Rs
1000
and
Rs
500
would
be
scrapped.
He
said,
"You
have
50
days
(from
10
Nov
to
30
Dec)
to
deposit
notes
of
Rs
500
and
Rs
1000
in
any
of
the
Bank
and
Post
office."
Notes of 100, 50, 20, 10 and coins of five, two and one rupee remain legal tender and will be unaffected by the decision. The PM also said that all banks and ATMs will be closed on Wednesday.
This scrappage of notes will have a consequential short-term impact on the sales of automobiles. Because there are still many customers who purchase cars in cash. Most of the dealers are worried about the booking amounts which are paid by the consumers in cash.
Industry experts have said their opinion about how this scrappage can affect the auto industry. Abdul Majeed, Partner, Pricewaterhouse said, "SUVs and luxury cars to have an impact on sales in the short term. However, on the longer run, there would not be much effect. However, it would not have much impact on the small cars.
"Reserve Bank has decided that on November 9 all banks for public purposes will be closed. New notes for Rs 500 and Rs 2000 will be brought into circulation. After the introduction of new currency notes, RBI will take steps to contain the amount of currency in circulation."
Nikunj Sanghi, Managing Director, JS Four Wheels said, "The customers who have planned their purchases in November will shift their purchase to next month. There will be an impact on November sales, as people who used pay the margin money and booking amount in cash have to wait for some time."