Automobile manufacturers have welcomed the policy rate cuts introduced by the monetary regulator, Reserve Bank of India, yesterday, in its monetary policy review. Auto industry experts say that this step may help to accelerate growth in the long run in this industry. It should be noted that policy rate cuts result in availability of cheaper financing (auto loans) for car buyers.
On the matter, the Director-General of Society of Indian Automobile Manufacturers, Mr. Vishnu Mathur said, "It will not immediately revive the industry, but it is a good move and on the right path by the RBI, as it was more important for controlling the inflation."
He further added that nobody was expecting the central bank to slash repo rate or cash reserve ratio by high degree. He said, "But it was a step forward and good for the auto industry, as now the companies can focus on growth as a priority."
An auto sector analyst, Mr. Kapil Arora, working with Ernst & Young said, "It will take some time to impact the financial market. But at the same time, sentiment is there to liquidate the market, as it will help manufacturers as well. It will be positive, not only for the passenger cars, but also commercial vehicles and two-wheelers."