Auto industry expects lower interest rate to revive sluggish demand
The RBI's 50-basis-point repo rate cut is expected to revive demand in the automobile sector, which has been grappling with sluggish buyer interest. Industry experts believe the rate reduction, coupled with a 100-basis-point cut in the Cash Reserve Ratio (CRR), will improve financing accessibility and lower borrowing costs, boosting consumer sentiment.
Shailesh Chandra, President, SIAM and Managing Director of Tata Passenger Vehicles Ltd & Tata Passenger Electric Mobility, said the reduction in the repo rate would have a positive impact on the auto sector since it would lead to increased accessibility to finance at reduced costs, thereby creating a positive sentiment amongst consumers in the market.
The move comes as automakers face weakening sales due to steep price hikes, particularly in the passenger vehicle segment, which have pushed cars out of reach for many buyers.
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