The Indian Automobile industry, which has been witnessing slow demand over last few months, has come up with a slight enthusiasm towards RBI’s decision of cutting short term lending rates. Industry experts believe that at least a cut of 100 basis points is currently needed.
Deputy Director General of Society of Automobile Manufacturer, Mr. Sugato Sen said that the basis point cut of 25 is nothing, industry currently need at least 100 basis point reduction.
He further said that reduction in the short term lending rate or the repo rate by 0.25% times in last two month is a positive sign but it should not be taken as a tactic to push up sales immediately. He sees this as a slow move and emphasized on need of some policy support.
According to the data from SIAM there has been a decline of about 5.45% in the sales of vehicles across various categories in the month of February 2013 as the sale closed at about 14,51,275 units as compared to the 15,34,910 units sold in the same month during last year.
The passenger car sales across the country have also been recorded as a 12 year low percentile for the month of February. The sale closed at a percentile of 25.71 %, witnessing a decline of about 1,58,513 units. The rise in the fuel prices, lower consumer sentiments and higher interest rates are being seen as the vital factor that are responsible for the reduction of sales.
With just a month to go for the end of the fiscal year, SIAM is already conclusive about the cars sales being in the wrong side of the line.
The Deputy Managing Director and CEO of Toyota Kirloskar Motor group, Mr. Sandeep Singh took the step taken by the RBI as a step in the positive direction. He further said that it is quite a good move for the industry and industry was expecting it from a long time.
It is not only the four wheeler segment that has been affected, sales of the two wheelers have also declined by about 2.77 percentage concluding the sales at 11,12,289 units in the month of February this year in contrast with the sale of about 11,43,982 units during the same period last year.