As the auto industry reopens after a total lockdown to contain the coronavirus, carmakers in the country are trying to create positive sentiments among prospective buyers by way of attractive financing schemes and other initiatives.

As 80 per cent of the cars purchased are financed, passenger vehicle makers believe that attractive financing schemes will help woo customers to buy cars.

Companies like Hyundai Motor India, Maruti Suzuki, Tata Motors and Renault India, among others, have been working out attractive financing schemes, including flexible schemes, to woo prospective buyers.

Hyundai has come out with what it calls the industry-first EMI Assurance Scheme under which it offers to pay three EMIs on behalf of the customers if they are faced with some uncertainties after 90 days of the vehicle purchase. Hyundai will pay those three EMIs and it is not a postponement.

Also, it has introduced five different financing schemes that offer several flexible options such as low EMI initially, and low EMI with a longer tenure, among others, for car buyers.

“In this current environment, there are many economic challenges. We feel prospective customers may have concerns over uncertainties such as loss of job. So, we have devised an innovative scheme to give peace of mind to the customers,” Tarun Garg, Director (Sales, Marketing and Service), HMIL, told BusinessLine .

Maruti Suzuki has also been talking to at least 12 banks, with which the company has been having a long association, for lower interest charges and flexible financing options.

“Given increasing risk aversion among financiers amid the slowdown and Covid-19-led pandemic, attractive financing schemes and expediting disbursal will help attract customers who otherwise could have deferred their purchase decision,” said Subrata Ray, Group Vice President-Corporate Ratings, Icra.

In addition to attractive limited period offers, Tata Motors is facilitating up to 100 per cent on-road funding of its entire range of cars and SUVs.

“Customers can also take advantage of the long-tenure EMI schemes (up to eight years) thus lowering the amount of their monthly EMI payments. The option of customising the EMI payments every year in line with their cash flows offers additional convenience and enhances benefits,” according to a spokesperson of Tata Motors.

French car maker Renault has also rolled out a host of customer-focused offers. Under its ‘Buy Now Pay Later’ scheme, customers can buy any Renault car in May and start paying the EMI after three months from the date of purchase. The offer can be availed either at the dealership, or on the Renault India website, or the My Renault app.

Its financing arm Renault Finance has announced programmes such as job loss cover and EMI protect plan. There are also offers across the product range including cash offers, exchange benefits and finance at a special rate of 8.99 per cent.

However, Ray pointed out that in the current environment, financiers will turn more cautious in lending and the overall loan approval process may get extended. “The share of banks and captive financiers will increase whereas the share of other NBFCs will witness moderation,” he added.

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