"While this is definitely a welcome move, but it is too little too late. We were expecting a rate cut of 50 basis points," General Motors India India Vice-President P Balendran said.
Moreover, the rate cut should have come a lot earlier than this, he added. Expressing similar sentiments, Ashok Leyland Vice-President (Buses) T Venkataraman said: "25 basis points cut is way too less".
Society of Indian Automobile Manufacturers (SIAM) Deputy Director General Sugato Sen also said it was not enough although the move is a welcome one.
"The 25 basis points reduction is not going to have any impact on the EMIs. We expect the rates to further come down in the next few months and also the banks to reduce their lending rates," Sen said, however adding it was a "very good beginning".
Stating that the impact of the rate cut will not be immediately felt in the market, Balendran said: "Already the increase in the excise duty has dampened the sentiments. All we hope is that this is the signal that rates will come down in future."
Sharing his views, Hyundai Motor India Ltd Senior Vice-President, Sales and Marketing Rakesh Srivastava said, "We look forward to further reduction and further initiatives on the ease of getting finance and low cost of financing.
"This will help the auto industry by bringing down the cost of ownership of vehicles and will act as catalyst to bring growth in the automobile sector."
Terming the rate cut as "on the expected lines since inflation has been coming down", in the long term, the move should help the auto industry and manufacturing sector in general, which is a key part of the government's Make in India campaign, he said.
The RBI lowered the benchmark repurchase rate to 7.75 per cent from 8 percent, the first reduction since May 2013.