Prime Minister Narendra Modi has announced that currency notes of Rs 1000 and Rs 500 would be scrapped. While addressing the nation PM Modi 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".
The scrappage of old Rs 500 and Rs 1000 note will have significant short-term impact on the purchase of the automobiles, as there are many consumers who still purchase cars in cash. A lot of dealers are worried about the booking amounts which usually people pay in cash.
According to industry experts, there would be significant short-term impact on the auto industry. "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," said Abdul Majeed, Partner, Pricewaterhouse.
"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.