Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
HDFC Bank becomes preferred financier for Telco cars - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Feb 23, 2000

    HDFC Bank becomes preferred financier for Telco cars

    HDFC Bank and Telco are entering into a strategic alliance where by the former will be the preferred financier for the Tata range of cars.

    The auto finance market has become increasingly competitive over the past few months with a number of financiers cutting interest rates. The current rate of interest on car loans varies between 16% for the economy car segment, 15.5% for the-mid segment and 15% for the premium segment. Apart from cutting interest rates, financiers are trying to increase their market share by offering customised scheme to their customers.

    A classic example to be quoted is that of the ballooning scheme which is very popular in the over seas market. In this scheme, the equated monthly instalments (EMI) would automatically be increased every year, depending on the salary hike enjoyed by the loan seeker. Both the car manufacturers and financiers are of the view that the balloon scheme loan system will be apt for the Indian market and will help to raise volumes.

    A tie up between the manufacturer and financier is not a new phenomenon in the car finance industry, with many such tie ups having taken place in the past. For instance Sundram Finance is a preferred financier for Fiat and similarly Countrywide Finance acts as a preferred financier for Maruti.

    The preferred financiers get discounts from the manufacturer on the car price, which they pass on to the customer without adding pressure to their bottom line. Consequently the consumer gets a more competitive rate of car finance. The tie up helps all the parties involved, right from manufacturer to financier to customer. The manufacturers are able to push their products in the market, increasing their volumes. The financiers are able to offer finance at more competitive rates and the consumer in the bargain gets car finance at low rate.



    Equitymaster requests your view! Post a comment on "HDFC Bank becomes preferred financier for Telco cars". Click here!


    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms