MUMBAI, 4 MAY 2022 (GPN): Statement by FADA President Mr Vinkesh Gulati on RBI rate hike:

The RBI’s move of increasing repo rate by 40 bps has clearly taken everyone off guard. 

This move will curb excess liquidity in the system and will make auto loans expensive. 

While PV segment may be able to absorb this shock due to long waiting periods, 2W segment which has been a non performer due to underperforming rural market, vehicle price hikes and high fuel costs, it will not be able to take one more blow of high vehicle loan costs. Ends

Certainly, this move will apply certain amount of brakes on auto retail and dampen the sentiments further.