After mining ban, car sales hit rock-bottom in Bellary

The mining ban imposed in Bellary has had an adverse effect on the sales of low-end cars in the city. According to the latest stats from the Bellary District Chambers of Commerce and Industry, the car sales have dropped 20% after the mining ban. Worst affected were the fuel dealers as the sales registered a whopping 70% dip.

Though the mining owners and biggies in the sector are not the direct customers, the fall in the demand of small end cars like Maruti, Hyundai and Toyota has been steady from the day of the ban.

Bellary doesn't have many resident corporates and iron-ore has provided the main business since 1995. But in the past one year, many small miners carried out mining activities in BUDA land, with private land being closed.

"Car sales have not been affected directly, but it has affected the other businesses in the city," VK Vijayanand, chief executive officer of Maruti dealers, KPF Pvt Ltd, said.

About 8,000 people employed in mining companies have lost their jobs in Bellary. That explains the lack of enthusiasm for purchasing cars. Some of these people booked the cars but later cancelled the booking citing various reasons, said an employee at a Hyundai showroom.

"Despite banks offering attractive loan offers, people are not coming forward to buy cars, as there is no source of income for them. Maruti has tied up with the State Bank of India, with the latter assigning sale targets in each branch. This festive season, the bank had lowered the interest rate on loan from 12.5% to 11.5%, still there were no takers," said Vijayanand.

KPF showrooms' business has suffered not just in Bellary, but Koppal and Raichur too.

Bhagyodaya Motors, who used to sell about 100 cars a month, are now selling about 40. Mahindra Scorpio is faced with a 60% fall in business.

Now, the showrooms have started to downsize.

When Reddys wanted to build a new airport, car showrooms went on a selling spree, holding special events in villages. But now, no one throngs such events as the main crop, paddy, and other crops have not been fetching good prices, forcing farmers to keep the crops with them. The fuel stations also witnessed a slowdown. Only 30% diesel sales have been registered after the ban on mining. Even the used-car business in Hubli and Dharwad has suffered with only 15 cars being sold in the past two months.