Tie-up in line with MUL's plan to sell more in semi-urban, rural areas
Kolkata, Sept. 20
Maruti Udyog Ltd (MUL) on Wednesday signed up with Magma Leasing Ltd for financing of Maruti cars in all price segments across the country.
Addressing newspersons here on Wednesday after signing of the agreement, Mr Jagdish Khattar, Managing Director of MUL, said the company was determined to motorise India in a big way by tapping opportunities in rural and semi-urban markets, where Magma has a significant presence.
Mr Khattar said that under the Maruti Finance scheme, MUL already had arrangements with finance companies such as ICICI Bank, HDFC Bank, Citicorp Finance, Kotak and Cholamandalam, and Magma was now added to that list. He said MUL also had a successful stand-alone arrangement with SBI and seven of its associate banks for car finance.
Describing it as a big day for the company, Mr Sanjay Chamria, Managing Director of Magma Leasing, soon to become Magma Shrachi Finance, following a merger with Shrachi Infrastructure Finance Ltd (subject to all necessary approvals), said MUL's recent thrust on `C' and `D' segment towns was already being catered to by Magma, which specialises in financing of new and pre-owned vehicles. He said that Magma will finance the entire range of Maruti cars through its own network.
Mr Chamria said the merged entity of Magma Shrachi will finance Maruti vehicles from 146 branches, almost evenly distributed between the regions with stronger access to the north and the south, arguably the biggest markets for Maruti vehicles. MUL, apart from its own 68 offices in 16 States, has presence in over 1,000 marketing clusters through channel partners. He described the company's tie-up with MUL as merging of "People's car with People's finance".
Mr Khattar said MUL has been rated first in customer satisfaction for the sixth year in succession in JD Power's surveys. MUL has a sales network of 365 outlets in 250 towns, and provides maintenance support to customers at 2,100 workshops in over 1,100 towns and cities.
He said that there was a huge untapped potential of first-time car buyers in the domestic market. Citing the new breed of emerging customers, he said their total cost of ownership with the Maruti vehicle was much better, given its low-maintenance cost and re-sale value.
On the contract manufacturing for Nissan vehicles, for which an additional investment of Rs 3,000 crore has been set aside, Mr Khattar said full-fledged production operations was expected to begin during 2008-09.