NEW DELHI: Leading passenger vehicle manufacturers are collaborating with banks and non-banking financial companies to offer attractive financing schemes to customers and boost retail sales.
A prospective customer may choose to pay significantly low instalment for the initial few months and then subsequently increase the payable amount at a pre-defined rate. Customers will also have the option to start paying the first instalment after a period of 90 days or in some cases even next year.
Sales of passenger vehicles are expected to decline by double digits in the current fiscal due to the covid-19 pandemic. According to Society of Indian Automobile Manufacturers or Siam, overall industry volumes might drop in the range of 25-30% in the current fiscal. Last year, wholesales of passenger vehicles declined by 18%.
In February, vehicle manufacturers increased vehicle dispatches to dealerships expecting higher sales in March, ahead of the the financial year end. The outbreak of the pandemic has left dealers with significant stocks of BS-IV emission norm compliant vehicles.
The country’s largest vehicle maker, Maruti Suzuki India Ltd, has partnered with lenders like ICICI Bank Ltd to offer monthly installments of ₹899 on a loan amount of ₹1 lakh for the first three months. Another scheme helps customers pay EMI as low as ₹1,797 per ₹1 lakh during the tenure, barring the last instalment when the customer will pay one-fourth of the loan amount.
The Delhi-based car maker has also collaborated with banks to fund 100% of the onroad amount for vehicles. Recently, the company partnered with the Cholamandalam Investment and Finance Company Ltd, a non-banking finance company, to offer schemes wherein customers would not have to pay installments for the first two months.
“While fighting the prevailing Covid-19 crisis we also need to help customers with attractive auto retail financial solutions their own personal mobility solution. Low down payment, low EMI products will definitely help aspiring customers to have their own personal mobility solution," said Shashank Srivastava, executive director, sales and marketing, Maruti Suzuki India.
Other car makers like Hyundai Motor India Ltd and Mahindra and Mahindra Ltd also suit.
M&M, the maker of Bolero and Scorpio sport utility vehicles, has also introduced vehicle finance schemes where customers get a moratorium of 90 days or can pay in 2021.