Vehicle Loans become expensive

A senior official of the Federation of Automobile Dealers Association (FADA) told that the automobile industry might receive a blow as the Reserve Bank of India's (RBI) decision to hike the repo rate by 45 basis points will eventually make vehicle loans expensive.

The President of FADA, Vinkesh Gulati informed that if we compare the auto sales in April 2022 with that of April 2019, the auto industry has still not fully recovered as total retail sales were down by six percent. He further told that other than passenger vehicles and tractors which increased significantly by 12 percent and 30 percent, two/three-wheelers, and commercial vehicles have not recovered yet as they are down by 11 percent, 13 percent, and 0.5 percent, respectively. 

In his statement, the President of FADA said, "The month of April (2022) saw similar Auto Retail figures as March'22. While YoY comparison with April'21 shows all categories in green with high growth rate, it is important to note that both April'21 and April'20 were affected by nation-wide lockdown due to phase 1 and 2 of the Covid wave which witnessed no to negligible business. Hence a better comparison will be with April 19 which was a normal pre-covid month.” He further told that the sudden increase in the repo rate by the RBI has left the industry vulnerable.