MUMBAI, Aug. 27 -- At Maruti Suzuki's dealerships in tier-2 cities, enquiries for the Brezza and the Swift have picked up through August, according to dealer networks across the Hindi belt. The explanation offered in every showroom is the same: the expectation that car loans will get cheaper when the Reserve Bank of India moves on rates. That move has not happened - the repo rate sits at 6.50%, unchanged since February 2023. But the Federal Reserve's Jackson Hole signal has shifted the conversation from "if" to "when," and the auto sector is pricing that shift now.

The Nifty Auto index has gained 0.8% month-to-date through August 27, one of the stronger sectoral performers in a month where the Nifty 50 is down 0.52%. That divergence is n...