With a surge in the demand for auto loans, the financiers are also back. In September, the top eight financiers disbursed loans amounting to Rs 3,400 crore. This is the highest for a month in the previous two years.
Last September, the demand for auto loans had dipped after the collapse of the investment bank, Lehman brothers. This together with an early arrival in the festive season, has led to an increase in the demand.
The disbursement in the month of September was 25 percent higher than the average of the preceding four months. Auto financier, HDFC observed an increase of 40% in the disbursement of auto loans over the previous year. Other banks like Canara bank, PNB, SBI, Kotak Mahindra bank also saw an increase of 25-35%.
Ashok khanna, auto loan head for HDFC said "We had a terrific month after a long gap as sales went much beyond our anticipated targets. We disbursed loans of over Rs 1,000 crore in September. The growth momentum is expected to spill over to October."
According to Kotak Mahindra bank's CEO, Sumit Bali, the auto loan market was on fire and had registered highest sales in the past few months. He said that the banks loan disbursal for the month was higher by 50%.
Another reason for this high demand could be low interest rates. State-run banks further spurred the demand by offering single digit interest rates as against 10-12% offered by private players.
An easier access to finance has also helped car-makers. "Customers are actually benefiting from the extremely low interest rates offered by few PSU banks. We have noticed that the bulk of customers who had postponed their purchases are again flocking to our dealers to buy new cars," said Maruti's chief general manager (marketing) Shashank Shrivastava.
A senior SBI executive said that the demand for new cars from the banks' tier two and tier three towns have been consistent. He also said that there was a ‘major jump' in the total allocations of the bank in September over August and a major chunk had come from the smaller towns.
Launch of host of new cars have also lured more people to buy them. Some of the new launches include Maruti's new SX4 and multi activity van-O 2, General Motors' Cruze sedan, Porsche Panamera, Volkswagen Beetle and Polo, Ford Figo, Hyundai Santa Fee, BMW Z4.