Two wheeler prices are likely to slide and banks' car loan portfolios are set to rise from October when millions of consumers start buying world's cheapest car made by Tata Motors, a survey said on Friday.
The survey on 250 chief executives by the Associated Chambers of Commerce and Industry of India also said second-hand car sales would fall by a minimum of 35 per cent.
Tata Goup Chairman Ratan Tata on Thursday launched 'Nano' costing only Rs 100,000 -- less than half the price of Maruti Suzuki's cheapest variant M-800 but slightly costlier than the latest Royal Enfield bike of Escorts.
Assocham said a vast majority of CEOs believe that Tata Motors has given a stiff challenge to two-wheeler manufacturers, who may be forced to cut prices by 20 per cent to maintain their market size.
Banks' loan exposure to the four-wheeler industry would go up by 25 per cent from October 2008 after Nano cars roll down on roads, it said.
A good percentage of respondents, however, said congestion on roads would multiply which will put pressure on governments to improve the existing road networks.
About 200 CEOs said states should exempt the 12.5 per cent value added tax on the small car in public interest.
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