New Delhi, Oct. 6 -- Automobile dealers are warning carmakers that price hikes could wipe out the benefit of last year's goods and services tax (GST) cut, potentially slowing the sales momentum seen across the industry just as it enters the festive season.

Price hikes and potential rate hikes by the Reserve Bank of India will shape the outlook in the coming months, Sai Giridhar, president of the Federation of Automobile Dealers Associations (Fada), told Mint.

"The silver lining out here is that, apart from the price hikes, there are consumer offer schemes. Because in the last year, when there were price reductions, the consumer offers were practically eroded," Giridhar said.

The entire ecosystem is built around keeping prices affordabl...