The bumpy ride for the Indian automakers will continue. The number one demand from Motown to reduce interest rates has been disregarded by RBI Governor Y V Reddy. The sales have been on a steady decline the past three quarters and no relief seems to be in sight.
The two wheeler and medium & heavy commercial vehicle sales have slumped over the April-December period. The auto companies felt a 25 or a 50 basis points would have improved the lending norms and thereby customer sentiment.
But it was not to be and the consensus now seems to be that the slowdown will continue unless the RBI steps in.
"The industry would continue to slump," said VP-Sales & Marketing, Suzuki Motorcycle India Pvt Ltd.
The banks have reduced their exposure to the auto industry as default rates continue to pile up especially on the two wheeler front. Lending norms too have become tighter resulting in reduced availability of credit but bankers are optimistic and do foresee a cut soon.
"We expect a rate cut in the next two quarters and would improve exposure," said Harpreet Singh, Business Director, Wealth Management, Distribution, Centurion Bank of Punjab Ltd.
With the growing competition and highly volatile market scenario the Indian auto makers have been compelled to think out of box. Experts say with no favours from RBI's monetary policy on Tuesday, the Indian automakers would surely be working overtime to revive their falling fortune.
If and when RBI decides to chip in, automakers would accept it with open arms till then its tough drive ahead
Source:-NDTV.COM
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