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RBI offers low interest rate for auto loans this festive season

Snapshot: The Reserve Bank of India has reduced the repo rate by 0.25 percent to a 6 year low of 6.25 percent, which can lead to lower rates of housing EMIs, car loans and corporate borrowing.

Indian automobile manufacturers hopes that RBI’s 0.25 percent cut in policy rate will lift consumer sentiments and boost the sales number during the ongoing festive season. The Reserve bank of India has reduced the repo rate by 0.25 percent to a 6 year low of 6.25 percent, which can lead to lower rates of housing EMIs, car loans and corporate borrowing.

According to R.C Bhargava, the chairman of Maruti Suzuki this lowered repo rate is a welcome step for the entire auto industry.  Hyundai has welcomed this step and termed it as a welcome gift by RBI. Honda has also praised RBI for this step and said it would help to improve the sentiments further. SIAM’s Deputy director general Sugato Sen hopes that banks would transfer the benefits to retail customers.

All automobile companies are looking for expanding their business and sales figure in India, for which they are providing various offers with the hope of attracting new and as well as existing customers. Alongside these lucrative offers, if the banks lower their interest rates due to the cut of repo rate, then it would serve as a blessing for the car manufacturers. 

Recently Volkswagen has kicked of its Volksfest 2016, which would give its existing and prospective customers several chances to avail attractive offers, service benefits and assured branded gifts. This carnival would be organised by all VW showrooms in India. Toyota has also kickstarted its drive the nation offer, where it would provide offers to all central government employees. Toyota is offering benefits on insurance, maintenance package and extended warranty.

According to recent data published by SIAM, the car sales has grown with a massive rate of 21% in the month of September. Brands like Maruti Suzuki, Hyundai, Mahindra and Mahindra, Renault, Nissan and even Tata Motors have seen a good rise sales growth. Now thanks to the upcoming festive season, car manufacturers are banking on this opportunity provided by the RBI and the festive season to increase their sales rate even further. 

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