The auto industry, led by market leader Maruti Suzuki and Hyundai, on Tuesday welcomed the RBI’s move to cut key interest rate by 0.25 percentage points stating it will help improve consumer sentiment.
Automobile companies said the actual benefit for consumers will, however, depend on whether the banks pass on the benefits of the rate cut.
“For the auto industry the impact of the rate cut will be more in improving customer sentiments. It is definitely a step in the right direction,” Maruti Suzuki Executive Director (Marketing and Sales) RS Kalsi told PTI. Expressing similar views, Hyundai Motor India Ltd Senior Vice-President (Sales and Marketing) Rakesh Srivastava said: “It is a welcome move. This is a step towards lowering the cost of credit. This will help both customers and channel partners and will help in bringing more volumes.” Commenting on how the consumers will gain from the rate cut, Kalsi said: “We will have to wait if the banks pass on the benefits to customers. Banks will have to pass it on first.”
He added however that the impact on EMIs will be minimal, as the current rate cut would “translate to a benefit of about ₹11 per month per lakh”.
Industry body Society of Indian Automobile Manufacturers Director-General Vishnu Mathur said now the onus is on the banks to pass the benefit to customers.