Sealing drive puts Delhi car market in the slow lane as demand drops by 10%

Demand for cars in the national capital territory of Delhi, one of the top markets in the country, is facing some heat this summer. Car dealers in the capital have seen a demand drop of at least 10 per cent, thanks to the sealing drive by authorities in various commercial areas. The sealing has impacted sentiment among buyers in the trader and business community, leading to a fall in purchases. 

“We are seeing a drop in demand for cars after sealing drives intensified in the city in recent months. There is a decline in enquiries as well as bookings. There are schemes and discounts in the market but these have not supported demand,” said a Delhi-based dealer of Maruti Suzuki with multiple outlets in the region. The news of price hikes by car makers did not lead to any uptick, either.

Delhi is estimated to have annual passenger vehicle (cars, vans and utility vehicles) sales of over 200,000 units which makes it the top city for the country’s car industry. The volume accounts for over six per cent of the total national demand. The Delhi market is estimated to have been growing at a double-digit rate in recent years, more than the national average of seven-eight per cent.

Dealers said the inventory at their end is higher by 15-20 per cent compared to March end as they continue to lift vehicles from manufacturers to qualify for annual incentives. “There is also a pressure from companies to continue wholesale purchases even though retail demand is on a decline”, said another dealer.

A sales and marketing executive with a leading car maker said that in the backdrop of a widespread sealing drive in Delhi, owning a new car is no longer a priority for many businessmen and traders. “Even in markets like Chandni Chowk where no sealing has happened, the traders are keeping purchases on the hold”, he said.

Since the start of this calendar year, the city’s municipal authorities have sealed illegal establishments in prominent local shopping complexes including Sunder Nagar, South Extension-I, Shankar Road Market, Green Park Market, Rajouri Garden and Hauz Khas.

Even in areas like Chandni Chowk where there is no sealing “June is not looking any better. We expect some revival in July when wedding season begins,” said another automobile dealer in the city. Many businessmen who depended on rental income from the real estate in such markets have also taken a hit. According to estimates from the Confederation of All India Traders (CAIT), at least 600,000 traders in Delhi city could be impacted by the sealing drive which is not yet over.