Cars sales to see a further dip?
With the increase in the interest rate, the automotive industry isn’t happy as this rise in interest will mean a further reduction in buying cars. Recently, the Indian car market has seen a downhill in sales, and the annual growth has been reduced to single digits from a whooping 32 percent a couple of years ago.
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The Society of Indian Automotive Manufacturers released a statement on this hike. The statement reads, ‘This increase in the repo rate is likely to impact the interest rates of car and automobile loans further. Evident from the continuous decline of sales in the last several months, the auto industry has already been reeling under a high interest regime. The industry had been hoping for a recovery through the ensuing festive season, anticipating an improvement in markets. But this move comes as a surprise dampener to all these expectations. The repo rate will also downgrade the sentiments of consumers struggling under the burden of high Equated Monthly Installments.’
It further continues as, ‘SIAM felt that the ideal move by the RBI would have been to initiate measures that would enthuse the market participants, boost investor sentiment and bring confidence back in the economy.’ So, possibly the rise in the interest rates could hamper the growth.
