Raghuram Rajan is the auto sector’s latest messiah!

It is true that RBI Governor Raghuram Rajan exceeded expectations by announcing key rate cut by 50 basis points.

This news also brought cheers to the Auto sector as automobile manufacturers said it was a festival gift for them.

The rate cut will help the Auto sector to meet 15-20% sales growth during the upcoming festive season.

"This is a festival gift. Traditionally, during the festive season, the auto industry witnesses sales growth of 15-20%, which was missed in the last couple of years. This reduction in rate by the RBI has assured that the growth will be achieved," said Hyundai Motor India Ltd (HMIL) Senior Vice President (Marketing and Sales) Rakesh Srivastava.

The reduction in interest rates will reduce cost of ownership and help the automakers get more customers. Automakers generally expect higher sales during the months of October and November when Durga Puja, Diwali and other festivals are celebrated.

Maruti Suzuki India Executive Director Marketing and Sales R S Kalsi also echoed the same sentiments.

“The market so far has been moving very slowly but with this (rate cut) sentiments will improve. It gives the much-needed boost to the market in the pre-festive season,” said Kalsi.

Hero MotoCorp Chairman and MD Pawan Munjal also lauded the rate cut and said it came at an opportune time as it will help in raising customer sentiment during the festival season.

The RBI cut its policy rate from 7.25% to 6.75% -- the lowest in four-and-half years.

(Image: Indiatimes)