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STAFF REPORTER
GUWAHATI: Safiqur Hussain (name changed), a city resident, put up his well-maintained 2014 Maruti Swift (petrol version), which has done about 50,000 km, for sale a month ago as he wanted to upgrade to a mid-size sedan or a SUV. Even though Hussain was expecting and confident to get his Maruti sold for Rs ?5.5 lakh, prospective customers are now asking for a huge cut in price.
Demonetization, which was announced on November 8, 2016, has hit hard the secondhand car business in Guwahati as well other parts of Assam as most of the transactions happen here through cash and informal borrowings. Cash payments had formed nearly 80 percent of transactions in the used car market before demonetization.
Many of the swanky showrooms of used cars that came along different busy city roads before demonetization, have now closed their shutters due to massive decline in sales. The Sunday Car Bazar, a pioneer in the field of used car business in North East has reportedly closed its showroom on Rajgarh Road. Two other showrooms on Rajgarh Road were also closed in 2018 due to slide in business.
“Demonetization had severely impacted the market. My business has completely flopped and I am starring at a bleak future,” Ajay Jain of Kiron Motors said.
“While cash crunch turned away some segment of buyers, other people who wanted to transact through financing mode had difficulties in getting documents from banks. There is also delay in completing the transaction. So, there is an uncertainty among the first time used car buyers,” an owner of a secondhand car showroom said.
Besides demonetization a few other factors has crippled the used car business in Guwahati. Raju Laskar of Hayat Auto said the present overall slump in auto industry has hit the secondhand car business. “People are now not investing in purchasing new cars. So, we cannot expect that they will sell their existing cars,” he said.
Laskar said the present cash-based transaction in the business is 20 to 25 percent which is lesser compared to the time before demonetization when it was 70 to 80 percent. “So, demonetization has boosted the business of organized players who deal only in non-cash,” he said.
Manjil Bora who also deals in secondhand cars, said in between 2005 and 2015 there were too many players in the unorganized sector. “Some of the unorganized players had turned out to be unscrupulous traders in the recent years. The development resulted in loss faith among customers and a large chunk of prospective buyers preferred to purchase first hand cars through finance from banks and other financial institutions,” Bora said.
Bora said easy finance options and sale of brand new cars at zero down payment by big players have also take away a large chunk of buyers who were otherwise interested in secondhand cars.
“Those ready to invest huge amount of money, will survive in the business. But days are numbered for small and unorganized players in used-car business,” Rajiv Dey, another car dealer said.