A recent press report said that carmakers in the country are expecting sales to slow down further following the hike in the petrol price of Rs 5 a litre at a time when the market is already reeling under pressure from high interest rates on auto loan.
Reports said that the industry players assume there will be more demand for diesel-driven cars. Mr. Vishnu Mathur, Director General, Society of Indian Automobile Manufacturers (SIAM), said that there are reduction in passenger car growth due to higher interest rates and the hike in commodity prices and that the rise in petrol prices could futher affect the sales. The country has recorded the slowest growth rate in 22 months in April this year at 13.18 per cent, mainly due to rising interest rates of car loan and other auto loans along with the declining consumer confidence.
Mr. P. Balendran, Vice-President, General Motors India said that the hike in petrol price wasis “definitely a dampener” and footfalls in car showrooms will come down considerably in the near future.
MSI’s Srivastava said usually the market rebounds after some time when there is a fuel price increase, but this time it has to be seen how it reacts as the market has already slowed down due to inflationary pressures.
He also said that although disposable income may have gone up in the last few years, high inflation in recent times has left consumers with less spending power