Car makers fear further decline in demand

Car makers fear further decline in demand

“It seems that now auto loan rates will go up and this is going to impact us definitely. Growth rate has already come down,” Honda Siel Cars India Senior Vice-President (Sales and Marketing) Jnaneswar Sen said.

General Motors India Vice- President P Balendran said: “The rate hike is going to further slow down the market. The Indian automobile market is already under a tremendous amount of pressure. We were expecting this time the rates to be unchanged, but the RBI has other priorities as well.”

Maruti Suzuki India Chief Financial Officer Ajay Seth said: “Market condition continues to be sluggish and the rate hike by RBI will have an effect on consumer sentiment.”

IHS Automotive India Managing Director Deepesh Rathore, however, said the rate hikes will dampen demand even during festive season. “It (rate hikes) will have an impact on the auto market. This festive season will not be as good as that of last year’s. We hope the interest rates should stabilise by the end of this calender year. We are not very optimistic for the next few quarters for all car manufacturers,” he said.

Car sales in domestic market recorded their slowest growth rate in 27 months in June this year at 1.62 per cent, mainly due to hikes in lending rates. Car sales stood at 1,43,370 units in June this year, as against 1,41,086 units in the same month last year.This was in sharp contrast to the near 30 per cent  growth witnessed during the whole of last fiscal. It was also the slowest growth rate since March, 2009, when sales increased by just 1.16 per cent.

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