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Mumbai, Nov. 12 Operational leasing and corporate vehicle management company Arval said it would invest Rs 400 crore in India in three years to build up assets.

The BNP Paribas-owned company, which started operations in India early this year, has a fleet of 500 vehicles and 60 corporate clients. “By 2011, we aim to have 6,750 vehicles. We will spend over Rs 400 crore for the purchase of vehicles. We will buy vehicles from Indian market only,” said Mr Liam Donnelly, Managing Director, Arval India.

Already, four major players – Leaseplan India, Orix, ALD Automotive and Arval – are operating in India.

According to the promoters of this relatively new auto financing structure in India, it offers certain advantages to corporate firms as the fleet management, maintenance and ownership are left with the leasing company. The companies need not use their own capital, corporate vehicles are “off balance sheet”, operational leasing is VAT efficient and all the risk on residual value and maintenance costs sits with the leasing company while the client pays a fixed monthly sum for the use of vehicles and services, said Mr Donnelly.

He said that the funding of Rs 400 crore for the purchase of vehicles will be from banks and financial agencies.

Arval is now operating in Mumbai, Pune, Delhi, Bangalore and Chennai.

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