Carmakers in the country believe the reduction in interest rates announced by State Bank of India (SBI) and HDFC Bank is not enough to help in increasing sales. A consortium led by Maruti Suzuki India said the complete benefits of RBI's rate cuts should be passed on. Furthermore, they insisted that lenders should cut interest rates by at least 50 basis points.
After RBI nudged banks to pass on the benefits of its two recent policy rate cuts, SBI cut its base lending rate by 0.15 percentage point to 9.85 per cent. HDFC Bank also followed suit and announced a similar reduction. ICICI Bank also lowered its base lending rate by 0.25 percentage point to 9.75 per cent.
RS Kalsi, Executive Director - Marketing and Sales, Maruti Suzuki India, believe that though the 15bps cut is a positive step, it is too small to have a concrete impact on EMIs and demand.
P Balendran, Vice President, General Motors India, said, "We were expecting at least 50 bps cut in interest rates. As the commercial banks have not passed on the benefits of the previous two policy rate cuts by RBI, the market continues to be very tough." Honda Cars India, and Hyundai Motor India, also believe it is a good development albeit with minor effects.
(With inputs from PTI)