As the Indian automotive market has been on a roll registering record sales month after month, the announced rate hike in the auto loans may not end its dream-run. While the private banks have announced a rate hike for the auto loans by 25-100 basis points, the industry experts are of a view that it may act a short-term blip for the sector but it will not affect the long-term outlook.

ICICI bank has announced a hike of almost 25-50 basis points while HDFC and Kotak Mahindra have announced a hike of 75-100 basis points. In the month of February, the top two automakers recorded whopping unit sales of
96.650 and 31,000 units by Maruti Suzuki and Hyundai respectively.

Maruti Suzuki expects to end the fiscal by almost a million of unit sales and expects that the rate hike in the loan rates will not affect the consumer sentiment in the Indian market. On an average, a hike of 25 basis points on a loan of Rs. One lakh generally account for a hike of Rs. 80 to 90 per month.