The lenders and auto manufacturers stated that the sales are slowing down even ahead of the festival season.
Vehicle financiers in India face a sudden decline in loans as auto loans have dwindled to 15% from 23% when compared to the same period last year, as per Mint. The lenders and auto manufacturers stated that the sales are slowing down even ahead of the festival season. The beginning of the season usually sees demand for auto loans every year but this financial year witnessed a major decline in the auto loan trends.
The four-wheeler market is witnessing a slowdown even though the market sees demand for two-wheelers and other luxury vehicles as the prices are going high on account of industry participation. This further elevates the auto loan rates as the retail borrowers have shrunk voluntarily when compared to last year’s loan rates.
As per the reports, banks like SBI, HDFC, ICICI, etc offer car loans starting at an interest rate of 8.75%, as it was 7.25% before two years. The growth in the passenger vehicles which comprise 41% of the total loan mix has moderated and maintained to be lower in the past quarters in the financial year, said Raul Rabello Managing Director, Mahindra Finance.
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It is hard to cope with the auto finance field as the company is seeking to flourish its new car portfolio as various organisations compete with each other maintaining fine prices amid this slowdown, stated Rajiv Jain, Managing Director, Bajaj Finance. These lenders also confront repayment delays in their dealer finance portfolios that could lead to piling up issues and combating the slow period of sales and shrinking loan demands in the auto sector.
On the other hand, top car manufacturers in India, including Maruti Suzuki, Hyundai, Tata Motors, Skoda, and Honda, are offering significant cash discounts, exchange bonuses, and additional benefits on their popular models. This strategic move aims to boost sales, drive growth, and maintain market share in a competitive field ahead of the festive season.
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