NEW DELHI: Automotive analysts and experts welcomed RBI measures to boost the economy and called the carmakers offering discounts and finance schemes to support buyers a 'timely' move to drive sales upwards.
“The discounts by OEMs and EMI moratorium will definitely boost the buyers' sentiments especially the ones who were planning to buy cars in this financial year after bonus/ variable payouts! Buying a car also becomes a need for many who want to shift to personal mobility from shared amidst the pandemic. These schemes are timely that will drive sales upwards, especially the lower and mid-segment,” said Maneesh Pant , vice president – Automotive, Mobility and EUC Sector Hubs – Capgemini India.
In a recent report, Capgemini noted 57 per cent of Indian consumers are likely to buy a car in 2020. Similarly, China sits marginally higher at 61 per cent, outscoring the global average of 35 per cent.
The Reserve Bank on Friday slashed benchmark interest rates and extended the moratorium on repayment of the bank for three months to ramp up support for the economy.
The central bank extended the three-month moratorium of loan repayments, from June 1 to August 31 and raised the limit on banks' group exposure to companies.
“Stroking demand is the biggest need and reality of today. OEM actions on EMI assurance and price benefits are very welcome in the current environment. Such initiatives are to get cars back in the consideration set of the by standers but impacting overall consumer sentiment will require a very different coordinated effort including government actions,” said Som Kapoor, Partner-Automotive, EY.
Maruti Suzuki, Hyundai, Mahindra&Mahindra, Renault, and other carmakers are offering discounts, cash benefits and EMI schemes to attract the customers.
Industry body SIAM said RBI's move would positively impact consumer demand, however, hoped banks would pass on the benefits of a rate cut to support demand creation for discretionary products like automobiles.
Society of Indian Automobile Manufacturers (SIAM) president Rajan Wadhera said, "The 40-basis point reduction in repo rate, which takes the key policy rate to 4 per cent is a welcome step by the Reserve Bank of India (RBI) to support a reduction in the cost of borrowing for traders and consumers and, hence, would positively impact consumer demand."