CORPORATE WINDOW: Relief on hold for the auto sector

THE cut in the interest rate to 12 per cent from 22pc in June 2024 is reviving auto financing at a snail’s pace as either the monthly instalments are still unaffordable or the consumers are waiting for a further drop in instalments after a possible future interest rate cut. For the last few months, banks and assemblers have been trying hard to lure buyers through promotional offers and lowering financing costs. As the market is abuzz with reports of a further interest rate drop by 1pc in the next Monetary Policy Meeting of the State Bank in March, the resulting anxiety keeps buyers away from car leasing. Bankers and auto sector stakeholders believe that people with handsome salaries in the corporate sector and big private firms are turning up for auto financing, while regular citizens still consider the interest rate too high for auto financing.