Now Dream of common man purchasing a car is fulfilled as innumerable banks are proffering car loans at competitive interest rates. But according to certain news report car loan market is going to dip as it is forecasted that car sales may dip as petrol prices have escalated further and this has affected car loan rates too. According to SIAM (Society of Indian Automotive Manufacturers), the apex body has revised the sales growth from target of 14-16 percent to that of 10-12 percent. Further, industry watchers concluded the fact SIAM can lower projection below.\
Car Sales have direct effect on car loan as people are purchasing fewer cars due to high interest rates car manufacturing industry is in panicky situation. Senior director of SIAM quoted it will be a miracle if the sales figures will be in double digit. Managing executive officer of a leading car manufacturer company, Maruti Suzuki revealed there are two causes behind lower sales or turnover in car segment first one being escalated petrol and diesel prices that is quite a nightmare and high interest cost.
These two factors act as deterrent in growth of car manufacturing segment. Hence, govt needs to tame spiraling inflation otherwise these car manufacturers will continue to suffer. Let’s take a bird eye view on petrol prices. In Chennai, petrol prices rose from Rs 61.94 to 67.49 a litre which clearly signifies that there is rise of Rs 5.50 hence your monthly budget may increase upto Rs 166.50 and yearly budget by Rs 2000 approx. This will hit the common man badly and that’s the reason they are postponing their demand of purchasing the car. In Delhi prices have further augmented from Rs 63.10 to Rs 68.61 a litre which signifies there is rise of Rs 5.51. Interest rate on car loans has risen by 300 basis points which mean 100 basis points=1% in past year.
Another senior director and manufacturing leader of Deloitte, India clearly said that car sales growth has been fluctuating widely and this year the growth will fall by 2 percent or it will be below 10 percent. The market sentiment is too bad and is going on worse direction further and car loans have trimmed down. To put simply, cost of owning a hatchback car has gone up by Rs 18000 to Rs 19000.Hence, people can’t afford to buy a car nor can they afford car loans due to soaring interest rates. To spur the sagging sales of petrol car manufacturers are showering discounts and other schemes to lure customers. Even sales and marketing director of Hyundai quoted that industry is facing adverse situation and high fuel price, high interest are not going to help anyone. Hence, he was quite hopeful for the month of September. The leading newspaper TOI further said that July is negative for overall passenger vehicle market. Trends in automobile sales show larger weakness in car segment. According to recent news crude oil price is also softening but the net effect or benefit is not available to consumer. Price water house Coopers further commented that sales will further decline and achievable target can be only 8 percent. Hence, the car loan market is worst sufferer in this case.
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