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.
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“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.