With the annual financial budget just around the corner, the expectations and concerns of the automobile industry have once again risen to a new height. It’s a no surprise that the growth in the automobile sector has not been up to the mark, despite several attempts by both manufacturers and government.
In recent times, the overall growth of India has become contingent on the automobile sector by a substantial amount, given the fact that our nation is on its way of becoming a major hub for exports of automobiles to various countries across the globe. Several manufacturers such as General Motors, Renault-Nissan, Hyundai, Bajaj and Honda have already strengthened their base in exports and have high hopes from the current government’s ‘Make in India’ campaign.
But to keep the momentum in an equilibrium with the domestic market, similar kind of strong measures need to be taken in order to push the sales in all kinds of segments - be it cars, two-wheelers or commercial vehicles. While the reduction in excise duty and measures for promoting the hybrid and electrical vehicles are the key expectations for the time being, the most important measure which needs to be the talk of the hour is a substantial reduction in interest rates for auto loans.
Reason? Almost eight out of ten cars in India are sold on the basis of finance from banks and various finance organizations. Keeping this fact in mind, there is a need to revise the interest rates for auto loans, as it will indirectly reduce the overall cost of loans as well. This move will certainly encourage those people to cement their decision, who are shying off buying their dream set of wheels due to the inconsistency in economy.
And there’s more to the story - not only a slash in interest rates of auto loans will rekindle the much-needed spark in automobile industry, but also will bring a significant boom in the country’s overall GDP as well. According to some predictions, the automobile industry has the potential to contribute majorly in the overall growth of India’s GDP up to 3.6 trillion USD by FY 2016-17.
Indeed, the reforms to be carried away in this direction are not cakewalks. Considering the pluses and minuses of every aspect related to the matter, a lot of homework and thought processes have to be accomplished on the table. The stage is setting up gradually, let’s wait for the final uplift of curtains!
Source : CarDekho