Easy finances, declining public transport push car sales in Kashmir: Survey

Valley’s private vehicle sales business to touch Rs 1100 cr in 2019; 90% cars purchased with borrowed money from banks

Srinagar, Publish Date: Nov 19 2018 12:37AM | Updated Date: Nov 19 2018 9:55AM
Easy finances, declining public transport push car sales in Kashmir: SurveyFile Photo

Despite low business confidence and sentiment prevails in the state, the cars sales in Kashmir have been witnessing sharp increase from past few years, thanks to availability of easy bank finances and declining public transport in the valley. 

According to a market survey recently conducted by the business acquisition team of J&K Bank, Kashmir’s car business has been growing at an annual rate of 15-20 percent. The survey also says that 90-95 percent business of Rs 900-crore yearly car sales come through bank finances.

A bank official, who was the part of the survey said the finance based car sales, which was about Rs 800 crore last year, are expected to touch Rs 1000 crore by the end of 2019. 

“Ever since 2014 car industry in India has doubled its growth and so is the case with Kashmir. While people in urban areas are upgrading their cars, bulk of new purchases have been taking place in the rural markets,” the official said. “Even in rural markets, maximum sales are reported from northern districts of Kashmir, the untouched automobile market so far.” 

The car business in Kashmir has witnessed a surge despite 2014 floods and 2016 unrest, which dampened the growth and business sentiment in Kashmir, says the survey. 

The survey gets a backing of automobile dealers, who say every month 2000 to 3000 new cars are rolled out by various dealerships across Kashmir. Besides a big of chunk people purchase their cars from outside valley as well. 

As per automobile industry estimates, there are almost 2000-3000 new cars rolled out by various dealerships every month. 

“The overall main reason for popularity of cars in Kashmir is poor public transport,” says the survey.

As per the data available with the national portal Parivahan, the sales of buses are on continuous decline in the state. 

As per the survey the most popular cars in demand are the ones priced between Rs 2.5 lakhs to Rs 3 lakhs. “After doing a pan industry survey of the automobile market in Kashmir we have come to a conclusion that average cost price per car is Rs 3.4 lakhs. As compared to this the average pan India trend is of a much higher value as the average price is Rs 6 lakhs per car,” the official said. As per the survey, despite Valley still not matching up to other cities in terms of popularity of high-end cars, the number of luxury cars on Kashmir roads has seen a considerable increase in last 2-3 years.

“While small cars or hatchbacks are the hottest selling cars in Kashmir, the likes of Mercedes, BMWs and Audis are also to be seen on roads here. But the interesting part is that even luxury cars priced between Rs 40 lakhs -Rs 50 lakhs get bank finance,” says the survey. 

As per the survey Maruti Suzuki is the leading player in Kashmir’s car business with 60 to 65 percent market share followed by Hyundai by 20-25 percent. “There are others like, Tata, Toyota, Nissan, Renault, Mahindra that grab the rest of the market share. Maruti due to its mass image and robust small car segment remains to be the undisputed market leader in Kashmir,” the survey says. 

The tax reduction by the central government and slashing down of excise duty coupled with offers from car dealerships in Kashmir has also been a reason for the increase of sales in cars in 2016-17 and 2017-18, says the survey adding that excise duty was marginally increased in the union budget announced in March 2018 but “even this has not affected the Kashmir’s car business,” the survey says. 

“There is seasonal growth in the car business in the Valley as it does occasionally go through a bad phase as well when sales are down. But during good sale season sales are quite healthy,” it stated.

Even as Jammu and Kashmir figures among three states where road accidents are alarmingly high across the country as per National Crime Records Bureau, a rapid increase in registration of cars in the state is being witnessed. As per automotive industry estimates, two-wheelers including bikes and scooty sales have also grown by whopping more than 70 percent in last two years. According to RTO Kashmir figures, more than 45,000 computerised driving licenses were issued in 2017-18 while in 2016-17 about 28,500 new driving licenses were issued. Data collected and put out by Union ministry of road transport and highways maintains that J&K ranks second in terms of the total number of road accidents per 10,000 vehicles. Sikkim and Madhya Pradesh are the two other states with the highest number of road accidents.

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