Various car makers in India have partnered with various public sector banks in India to offer better car finance to its customers. Private banks offer car finance at the rate of 13-15 percent while the PSU banks offer rates at 11-13 percent.
Honda Siel Cars India is turning to public sector banks for car finance to expand its market presence in the country. It recently tied up with Punjab National Bank for ca finance to provide car finance for its customers and capital investments for its dealerships. "Public sector banks have strong presence in Tier II cities and we have also expanded rapidly in those places. Partnering a bank like the PNB will help us enhance our presence in these smaller cities," HSCI Senior General Manager Marketing and Sales Jnaneshwar Sen said. Punjab National bank will offer loans up to 90 percent of the on-road price for Honda models for seven years at the rate of 10.5-11 percent.
Other car makers like Tata Motors, Maruti Suzuki, Mahindra and Mahindra have also tied up with PSU banks for better vehicle financing facilities in India. Tata Motors has tied up with Corporation Bank to fund purchase of its range of passenger vehicles. The company has said that the bank will offer loans up to 85 per cent of the vehicle’s on road price, for periods up to five years, at 11.75 per cent a year interest. The bank will also process the loan applications within seven days.
Maruti Suzuki, the market leader, has been partnering public sector banks for some time and has increased its financing arrangements with more of them. Hyundai Motor India too has getting into such arrangements with the nationalised banks, even as private sector banks have slowed down on car financing.
