As the economy is getting tight by the day, analyst expect the industry to hit a minor speed-breaker at the most if Reserve Bank of India ups policy rates later this month, but overall, the picture of the Indian automobile industry remains rosy.

It is believed that the RBI will announce a policy rate hike of 25 basis points in its mid-quarter policy review, which will in return persuade a couple of banks to raise their car loan rates.

C Ramakrishnan, chief financial officer of Tata Motors, India's largest commercial vehicle maker by sales said that a small hike in the price of the product is not expected to slow the demand for automobiles in the country.

While a lot of auto major will surely pass on the hike to the consumer which are already working on very tight margins, it is believed that the Indian consumer will not postpone the decision to own his vehicle.

Alchemy Research analyst Mayur Milak said that as the industry will announce many launches in the festive season, it is expected that it will offset the impact of the price hike.