Anil Ambani's RCF set to do GE in auto financing

[dadu]

NEW DELHI: What GE Money is doing in home loans, Reliance Consumer Finance (RCF) will likely do in auto finance. While GE Money has spiced up the market by launching the lowest interest home loans at 9.9%, the entry of RCF in auto retail finance in the next few days is likely to make vehicles more affordable.

RCF is expected to offer one of the lowest interest rates when it officially launches its auto retail business on October 18. The company, which is operating in select regions in the past few months, will roll out its pan-India operations with a market exposure of Rs 15,000 crore for the first year. It aims to emerge one of the top three players in the Rs 72,000-crore auto retail market.

The company spokesperson declined to comment on the new offers that it plans to dole out. A senior RCF executive said, “We are aiming for the top slot along with market leaders, ICICI Bank and HDFC Bank, in the auto retail space. We have been studying the market for the past three months and have already tied up with major original equipment manufacturers like Maruti-Suzuki, Hyundai Motor India and Tata Motors for specially structured finance schemes.” The company is currently financing both commercial vehicles and passenger cars and plans to venture into two-wheelers and other segments after October 18.

Currently, more than 95% commercial vehicles, 75% passenger cars and over 60% two wheelers are financed. Ever since the the Reserve Bank of India introduced tight monetary measures, the auto sector has been reeling under high interest rates — the highest in five years.

It has led to delinquency, forcing banks and financial institutions to go for stricter lending norms, which is one of the major reasons for the demand decline in the auto industry. Total vehicle sales dropped by 5% to 36.96 lakh units in the April-August period this year compared to 38.89 lakh units in April-August 2006. Major auto companies like Maruti-Suzuki, Tata Motors, Hyundai Motor India and utility vehicle major Mahindra and Mahindra have blamed the sales slump on high interest rates.

ab aayega asli mazaa.

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[Zappo]

Hmmm... knowing Reliance I am not very enthusiastic as yet. Most of their financial dealings with the public ends up in some jhol-jhapaata or the other.

[mclarenracer]

great, intrest rates in US are far lower than that in India, this is a good start to bring them on some level or atleast close to 4% on new car we paid here in US.

[Samurai]

If their billing is anything like they did for their post paid phone service, you can expect them to hire bill collection goondas by the bus loads and unleash them on unsuspecting customers.

[adityamunshi]

Originally Posted by Samurai

If their billing is anything like they did for their post paid phone service, you can expect them to hire bill collection goondas by the bus loads and unleash them on unsuspecting customers.

I couldn't agree more. And even if they have the lowest interest rate, you can be sure you'll end up paying a lot more than you think...

[dadu]

Nothing new with this, its the same story with every bank and their recovery agents which is getting highlighted quite frequently in the media and I hope something will be done about it.

Originally Posted by Samurai

If their billing is anything like they did for their post paid phone service, you can expect them to hire bill collection goondas by the bus loads and unleash them on unsuspecting customers.