RBI rate cut to enhance affordability, boost auto demand: SIAM

The move is expected to make housing, auto and commercial loans cheaper, potentially boosting retail demand across segments.

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The Reserve Bank of India’s decision to cut the policy rate by 25 basis points, combined with recent GST reforms, is set to further strengthen demand in the automobile sector by improving affordability for consumers, industry body SIAM said on Friday.Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM), said the latest rate cut, along with earlier reductions in the repo rate, reinforces a favourable monetary environment and is expected to lift consumer sentiment.“Coupled with the income-tax relief measures announced in the Union Budget 2025-26 and the landmark GST 2.0 reforms, this creates strong enablers for further enhancing affordability and accessibility,” Chandra said.He added that SIAM remains optimistic that the alignment of monetary and fiscal measures will help accelerate the industry’s growth momentum.

Despite concerns over the depreciation of the rupee, the RBI on Friday reduced the key interest rate to 5.25 per cent to support economic growth, which accelerated to a six-quarter high of 8.2 per cent in the July–September period.

The move is expected to make housing, auto and commercial loans cheaper, potentially boosting retail demand across segments.