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Car makers to feel the pinch of RBI’s rate hike
Published on 6 May. 2011 11:00 PM IST
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: RBI’s rate hike could not have come at a worst time for the car industry that is already witnessing a slip in demand as expensive financing and costlier fuel turn people away from showrooms. Companies and analysts said demand could see a severe dent from the 30%-plus highs of last fiscal as banks further jack up interest rates and EMIs become fatter.
This is the ninth successive hike for interest rates since March last year, and interest rates have slowly and steadily been inching up, hovering around the 13% mark now.
While car sales grew by 30%-plus in 2010-11, the outlook for this fiscal was pegged at nearly half of this. Market players say even this looks difficult now as not only are interest rates rising but so is the price of fuel as well as that of vehicles, which are becoming dearer on higher inputs.

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