Triumph Motorcycles offers 7-year loan scheme to make its bikes more affordable
British motorcycle maker Triumph Motorcycles Ltd is pulling out all stops to make its models more affordable in India. After stitching up a global alliance with Bajaj Auto Ltd to produce the mid-segment bikes locally, the iconic British brand is offering an attractive finance scheme to make its high-end models easy on wallets.
Under the scheme, the maker of Bonneville motorcycles is offering a seven-year loan for all its models through a tie-up with HDFC Bank Ltd.
The move, a first for a premium two-wheeler maker according to Triumph Motorcycles (India) Pvt. Ltd managing director Vimal Sumbly, will help the firm attract customers who may otherwise not be able to afford the bikes. The Triumph motorcycle range in India starts from Rs7.3 lakh and goes up to Rs23 lakh. Typically, loans for superbikes are offered for tenures ranging from three to five years.
“HDFC has been our preferred financier. Owing to a huge portfolio of models that we have and a profile of customers that have a clean credit history, they are now offering a loan for seven years with an interest of 11.5%,” said Sumbly.
An email sent to HDFC Bank on Thursday remained unanswered at press time.
Among other factors, easy finance schemes have been fuelling growth in the superbike segment, which used to be the preserve of a select few until a few years ago. Sales of superbikes (those with engine capacity of more than 500cc) have been growing at a brisk pace. From 500 units a year in 2008, sales grew to 10,000 units in 2016 and are expected to double in the next three years, said Sumbly.
He expects the superbike market to go the luxury car way in India, which too has been advancing at a fast clip, albeit with some hiccups in the last two years due to regulatory and policy changes.
Banks are keen to ride the bandwagon and have designed specific schemes to address the market. HDFC Bank, for instance, offers a separate two-wheeler loan scheme called “Super Bike Loan” as per its website. The scheme offers funding of up to 85% of the bike’s cost, which can go up to 90% depending on the buyer’s profile and credit history. It also provides funding of up to Rs2 lakh for accessories. The interest rate for this scheme is 12.9%, lower than some other two-wheeler loan schemes.
Seven of every 10 models sold by Triumph in India are bought on credit. Of this, half the buyers take a loan for one-and-a-half to two years, and the rest borrow for three to five years.
Launched at the beginning of this month, ahead of the festive season, the seven-year loan scheme, said Sumbly, would add momentum to sales volumes. “The scheme will take care of the festive season. The Triumph models now become affordable at a monthly instalment of Rs8,000 to Rs10,000,” he said, adding that the company was earlier offering the scheme only for a couple of high-end models, but now the scheme is applicable for all the models across its range.
“While it (the seven-year loan scheme) sounds attractive, it’s unlikely that buyers will want to take a liability for such a long tenure given the shrinking life cycle of models,” said an analyst at a consulting firm, declining to be named.
Some of the public sector banks dabbled with seven-year schemes for small cars seven to eight years ago, but most have been discontinued as they are fraught with risk, added the analyst.
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