Indian auto makers' monthly domestic sales plunged in November from the previous month as an intense cash crunch in the country brought a recent recovery in consumer demand to a screeching halt, especially in rural areas. In some of the first tangible evidence of the impact on company results from Prime Minister Narendra Modi's surprise ban on 500 rupee and 1,000 rupee banknotes, domestic sales at Tata Motors, India's biggest auto maker by revenue, fell 28.4 percent month on month to 33,274 vehicles.
Mahindra & Mahindra, India's top maker of sport utility vehicles, had domestic sales of 29,814, down 38.8 percent from October and 24.3 percent year on year.
Other smaller auto makers also reported double-digit percentage declines from October's sales.
A pick-up in consumer demand for big-ticket items such as cars had been a bright spot for India's economy, and the profits of auto makers, helping gross domestic product to an annual expansion of 7.3 percent between July and September, the fastest rate for a large economy.
But Modi's surprise ban on November 8 of banknotes that accounted for 86 percent of currency in circulation has severely dented consumer confidence.
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