Public sector, Andhra Bank expects its car loan portfolio to rise towards the end of the fiscal at the backdrop of picking up automobile demand. The bank targets to disburse another Rs 170 crore car loans for the remaining part of the ongoing fiscal.
The executive director of Andhra Bank, Anil Girotra informed that currently the bank is extending car loans worth Rs 250 crore. He said that the demand in the automobile sector is expected to rise due to a significant increase in the rural incomes. However the urban population is facing some financial crunch after job losses in the recent times. But the economic slowdown has not affected majority of the Indian population that was dependent on agriculture alone and as farm income had increased, not many people have been hit by recession.
Andhra Bank has now tied up with General Motors India to offer car loans to the latter's customers. The bank has also entered into an agreement with Maruti for the same purpose. The bank will offer car loans at 11.25% to women and 11.75% to men for a three year term.
General Motors India sales director Sumit Sawhney said that the company has a good market in the Andhra Pradesh. Nearly 8% to 10% of the total car sale of General Motors came from the state.
General Motors reported a 10% growth in its sales during the year 2008. The company managed to sell about 66,000 cars even amid the slowdown. Out of the total car sold, 6,000 were sold in the state.
The company expects its sales to further rise by 20% in the current calendar year. Mr Sawhney said that the company would pass on all the benefit that it will get through cut in sales tax and excise duty to its customers.
Recently many automobile dealers have been signing pact with banks in order to get their vehicle financed. PNB has just entered into an agreement with Hyundai Motors so as to distribute its products.