Mahindra & Mahindra (M&M), which specialises in tractors, utility vehicles and some of India’s best-performing SUVs, has seen a 22% decline in its units sold in November 2016. The automaker sold 32,499 units in the month, as compared to the 41,590 units sold in the year-ago period. It said that sales in India fell after the demonetisation announcement in early November. Domestic sales alone dropped 24% , falling to 29,814. Meanwhile, exports rose 22% to 2,687 units. The sales performance was below what analysts were expecting. While Motilal Oswal expected a 14% drop, Nomura had only expected sales to slip 9.5%.

Meanwhile, sales of passenger cars, vans and utility vehicles dropped by a third to 13,217, and commercial vehicles fell 15% , ending the year at 12,644 units sold. The passenger vehicle sales include popular models like the Mahindra Scorpio, XUV500, Xylo, Bolero and Verito. Tractor sales alone went down 21%, falling from 21,717 to 17,262 units, despite exports rising a healthy 50% to 1,344 units. Rajesh Jejurikar, President and CEO of the company’s farm equipment & two wheeler division, expects the effect of demonetisation to subside soon. Also Read: Mahindra sales down 22% at 32,499 units in Nov

Pravin Shah, M&M Chief Executive (auto division), said: “While we expected an improved auto industry performance on the back of festive season and other positive parameters such as rural demand and interest rates softening, the sudden announcement of demonetisation has brought in an immediate disruption and uncertainty.”

Although, demonetisation is a good and welcoming step in the mid to long term, this has dampened overall sentiments leading to postponed buying thereby resulting in a major dip in volumes during November, he added.

“This is significant as the automotive industry had just started experiencing stability post a long and tough period of uncertainty,” Shah said.