Rising interest rates to hit car sales: Hyundai
Bangalore : Rising interest rates on personal, retail and car loans would affect the uptake of passenger cars during the fiscal 2007-08, a top Hyundai official said here Tuesday.
"Interest rates on car loans have gone up by 350 basis points during the last three months. Though the passenger car market will continue to grow in double digits, higher interest rates will slow down sales in short and medium term," Hyundai Motor India Ltd (HMIL) vice-president (marketing) Arvind Saxena told reporters at the launch of Getz Prime.
As one of the key drivers in boosting passenger car sales, personal and car loans with lower interest rates had helped automobile firms such as Hyundai, Maruti and Tata Motors register impressive growth rates over the last couple of years.
Various fiscal and monetary measures, initiated by the government and the Reserve Bank of India (RBI) to curb inflation rate, has led to a sharp increase in interest rates.
"Though it is too early to quantify the impact, higher interest rates will make it difficult to discerning buyers from going for a car loan in the prevailing scenario. It will be a setback to the Indian automobile industry, as buyers would rather wait for the interest rates to the previous lower levels," Saxena said.
