Exclusive: Cardekho tells us how demonetization has affected the online auto industry

The scrapping of currency notes of INR 1,000 and INR 500 has taken the nation by storm. The government assured that this would have a short-term impact, but the tremors of this upheaval could be felt throughout various sectors.

In the automobile sector, this move has had a huge impact on vehicle dealers who usually accept booking amounts in cash.

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While it was expected that this will effect largely the expensive cars. but now, a new report by ICRA reveals that the two-wheeler industry is also at an equal loss. As per ICRA’s estimates, rural markets account for about 60- 65% of the entry segment motorcycle sales and given the high propensity for cash purchases in the rural markets, the entry segment of the motorcycles is expected to be a casualty.

Business Insider caught up with Amit Jain, CEO, and Co-founder, Cardekho to find out how the move has affected the business during the last quarter of this year.

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‘’We saw a 40% dip as soon as demonization happened. Luxury car segment has seen a dip by 50-60% in sales. There has been a dip in the car search queries and used cars have taken a bigger hit than new cars’’ he says.

Mr. Jain mentioned that he is happy with the move with overall developments that will be taken in the future but the sales have surely been affected this year with new cars being affected up to 20-30% in terms of sales. He believes that the main reason is down payment money is not available to customers for old or new cars as their reserves have been used to manage the situation.

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Cardekho is still being affected as the traffic is 10% below the normal traffic compared to last year.