Car, consumer durable makers rejoice on RBI's 'festive gift' – Moneycontrol.com



Automobile companies and consumer
durable manufacturers are banking on RBI’s ‘festive gift’ of
0.25 per cent cut in policy rate to lift consumer sentiment
further and boost buying in the ongoing festival season.

In a move that is expected to lead to lower rates for
housing EMIs, car loans and corporate borrowing, the Reserve
Bank reduced the short term lending rate (repo rate) by 0.25
per cent to 6-year low of 6.25 per cent in the fourth
bi-monthly monetary policy statement.

“Industry was looking forward for this for a long time.

It is a welcome step for the entire auto industry,” Maruti
Suzuki India Chairman RC Bhargava told PTI.

Hyundai Motor India Senior Vice President Sales and
Marketing Rakesh Srivastava termed the step as a “welcome
festival gift by the RBI”.

“It is a welcome festival gift by RBI and the customers
will appreciate it as it will support their buying. It will
help create an overall multiplier effect across all segments
and geographies,” he added.

Echoing similar sentiments, Panasonic India Head – Sales
and Services Ajay Seth said, “The timing cannot be better than
this as it will certainly add to the festive fervour with
lower interest rates helping in increasing our rural
consumption.”
Lloyd Electric and Engineering Ltd Director Nipun Singhal
said overall there is a positive feeling in the market with
good monsoon and implementation of the 7th Pay Commission and
now the rate cut by RBI.

“This will further help consumers buying more products. We
expect consumers durables industry to grow by at least 15-20
per cent this festive season,” he added.

Honda Cars India Ltd Senior Vice President Marketing and
Sales Jnaneswar Sen said the move will help in improving the
sentiment further.

“It is a positive step that will improve the sentiment,”
he said, but added that “the real impact of this rate cut will
be visible when the commercial banks pass on the benefit by
lowering the car loans”.

SIAM Deputy Director General Sugato Sen hoped that banks
would extend the benefit to the retail customers.

“It is a welcome step from all aspects. The RBI governor
has begun on a positive note. The move will help the industry
if the banks also pass on the benefit to customers. It will
help in lifting the positive sentiment further during the
festive season,” he said.

The cut, first in six months, came amidst big clamour for
easing rates especially after the departure of former Governor
Raghuram Rajan, who was often accused of stifling growth by
keeping rates too high.

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