Automobile manufacturers in India are expecting banks to reduce interest rates on car loans to help them recover from losses incurred from sluggish sales in the 2011-12 fiscal. The Indian automobile industry witnessed slow growth in the fiscal due to high interest rates which dampened the purchasing sentiments of customers.
After the reduction in the short-term lending rate by 0.5 percent by the Reserve Bank of India, carmakers are now hoping for the banks to reduce lending rates on car loans. Commenting on the development, Mr. Mayank Pareek Managing Executive Officer (Marketing and Sales) Maruti Suzuki India stated that an interest rate cut would be beneficial for growth in automobile industry.
Mr. P Balendran Vice-President General Motors India voiced similar sentiments stating that since almost 85 percent of the automobile in India are purchased through finance, a reduction in the interest rates will boost sales and growth.