×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Mitsui ties up with Axis Bank to finance Yamaha motorcycles

Mitsui ties up with Axis Bank to finance Yamaha motorcycles
Comment E-mail Print Share
First Published: Thu, Apr 10 2008. 11 37 PM IST
Updated: Thu, Apr 10 2008. 11 37 PM IST
Mumbai: Japanese trading firm Mitsui and Co. Ltd, which recently signed an agreement with world’s second largest bike maker Yamaha Motor Co. Ltd, is starting a venture with private-sector lender Axis Bank Ltd to finance Yamaha bikes in India.
Mitsui will own a 64% stake in the company and Axis Bank 26%, while the remaining 10% ownership will rest with Yamaha, according to a person close to the development who did not wish to be identified.
The joint venture is likely to be christened Bussan Auto Finance Ltd. Incidentally, Mitsui’s Indonesian arm of auto finance is called P.T. Bussan Auto Finance (Indonesia).
Bussan will finance only Yamaha bikes in India. Mitsui on 5 March signed a deal with Yamaha to set up a company to make motorcycles in India.
Yamaha had said it plans to replace its bike business in India with the new venture called India Yamaha Motor Pvt. Ltd, Bloomberg news agency reported on 5 March, quoting a company statement filed with the Tokyo Stock Exchange.
Yamaha’s bike business in India has been logging losses since 2001.
Yamaha and Mitsui were supposed to begin the operation of the company in April.
The tie-up follows Mitsui, Japan’s second largest trading company, buying a 3% stake in Yamaha last year. It will take a 30% stake of total planned capital of Rs560 crore ($140 million) in the venture, which will use the factory and office facilities used by Yamaha Motor India at Surajpur near New Delhi, according to Bloomberg. Mitsui’s new retail finance venture will be in addition to this. The proposed non-banking finance company has got the Reserve Bank of India’s approval and is expected to start operations later this month.
The two-wheeler finance market in India is worth about Rs12,600 crore, according to a senior ICICI Bank official. ICICI Bank Ltd and Centurion Bank of Punjab, that was recently acquired by HDFC Bank Ltd, are so far the major players in the market.
However, other banks, including Axis Bank, also provide two-wheeler loans, although in a smaller way.
Mitsui Group is one of the largest conglomerates in Japan and is one of the largest publicly traded companies in the world. In India, the group is present through Mitsui India, which started operations in 1998 and is engaged in shipping, trading and technology services.
Ammar Master contributed to this story.
Comment E-mail Print Share
First Published: Thu, Apr 10 2008. 11 37 PM IST