RBI Rate Cut won't have any Major Impact on Autombile Demand

Reserve Bank of India that has cut the repo rate by 25 basis point to 7.75 per cent, will not have any major positive impact on automobile demand, according to the industry players Speaking to PTI, Society of Indian Automobiles Manufacturers (SIAM) President S Sandilya said, "This is definitely a positive development and it is likely to send a positive signal in the market. Although it is very less, with the lowering of interest rates, consumers' sentiments will get a boost,"

Maruti Suzuki India called the apex bank's decision as a move in the right direction, however MSI COO- Marketing & Sales, Mayank Pareek says, "but it is too less for now. This step alone may not bring in any big impact, at least in the automobile market,"

Mahindra & Mahindra President (Automotive and Farm Equipment Sectors) Pawan Goenka says "Today's combo of a repo as well as CRR cut is a welcome announcement and hopefully, will help revive investments in the core sectors, which the economy needs. Coupled with the recent policy announcement by the government, I see this as a good beginning,"

Speaking about the same, General Motors India's Vice President P Balendran said that the industry was expecting a repo rate cut of at least 50 basis points to bring down the borrowing cost. "I don't think a reduction of 25 basis points will immediately support the revival of demand. Since the overall economy continues to remain under pressure, the small cut is not likely to make any difference as far as demand scenario is concerned," he added.

Balndran further said, "I hope more rate cuts will happen progressively in the coming months"

Source: ET