The subsequent time you stroll right into a two-wheeler showroom, don’t be perplexed when you discover it tough to get a automobile mortgage from the banks. Rising non-performing asset (NPA) ranges have pressured banks to develop into further cautious in lending to the two-wheeler sector which, moreover the industrial autos section, has develop into extra susceptible to compensation defaults. Extra on this later however earlier than that here’s a full transient on all of the vital developments within the auto area this week.
Tesla in talks with Karnataka
Karnataka has provided Bengaluru because the vacation spot for Tesla’s Indian Gigafactory, and the corporate has already held preliminary discussions for a analysis and innovation unit within the metropolis.
Bengaluru is probably going a shoo-in for Tesla as its Indian unit – acquired from Toyota in July, relies within the metropolis. In addition to, different EV makers comparable to Ather Vitality, Bosch, Daimler, Mahindra Electrical and Ola Mobility are additionally based mostly within the space.
Hyundai India produces extra automobiles than China
India marched previous China to prove the very best variety of Hyundai automobiles exterior South Korea in 2019, producing one in each 4 of the corporate’s automobiles worldwide.
That is regardless of China having Hyundai’s largest manufacturing capability on this planet exterior South Korea and twice its capability in India.
Electrical two-wheeler demand rise
Excessive-speed electrical two-wheeler gross sales have grown 18 % year-on-year (YoY) since June 1, highlighting a rising client curiosity in electrical mobility put up the lockdown.
In accordance with knowledge shared by the Society of Producers of Electrical Autos (SMEV), 6,976 high-speed electrical two-wheelers have been bought between June and September, in comparison with 5,897 items bought in the identical interval final 12 months.
MG launches Gloster at Rs 28.98 lakh
MG has simply introduced costs for its new flagship SUV set to rival the likes of the Ford Endeavour, Mahindra Alturas G4 and the Toyota Fortuner.
The brand new full-size SUV was first showcased on the 2020 Auto Expo. Whereas all the small print of the SUV had already been shared, costs had been stored below wraps.
Automotive gross sales collect steam
For the primary time in 2020 retail gross sales of automobiles and SUVs in a month surpassed gross sales of the identical month final 12 months, signalling a pickup in client demand.
As per knowledge shared by the Federation of Car Sellers Affiliation (FADA), retail gross sales of passenger autos (PV) throughout September grew almost 10 % to 195,665 items as towards 178,189 items clocked in the identical month final 12 months.
Mercedes-Benz rolls out EQC at Rs 99.three lakh
German luxurious carmaker Mercedes-Benz on Ocober 8 kicked off its electrical autos journey in India with the launch of EQC mannequin at an introductory worth of Rs 99.30 lakh.
The all-electric SUV, which is the primary product below Mercedes-Benz EQ model, is powered by an 80 kWh lithium-ion battery with a variety of 445-471 km on a single cost.
Banks go cautious about lending to two-wheelers patrons
Whereas the Reserve Financial institution of India (RBI) introduced reductions in lending charges over the previous few months, banks have been reluctant to get the two-wheeler purchaser to learn from the lowered charges. This has led to a lower in automobile financing for the two-wheeler sector which is now estimated to be at 40 % from greater than 50 % about two years in the past.
“Within the run-up to the festive interval, banks often come out with enticing finance schemes. However this 12 months, in gentle of rising NPAs, banks have by no means been proactive in lending to the sector. Shoppers are both pressured to go for NBFC loans or go for an all-cash deal,” stated a senior government of a two-wheeler making firm.
Two-wheelers usually are not thought of to be a first-rate lending section for the monetary establishments on condition that a big a part of the two-wheeler market (greater than 50 %) is made up of the low-cost, entry-level bikes. These are primarily purchased by patrons belonging to the low-income group thereby making them susceptible in excessive conditions like a lockdown.
The RBI, in a report, stated public sector banks’ gross unhealthy loans ratio of 11.three % on the finish of March might improve to 15.2 % by March 2021 below the baseline state of affairs. Personal banks may even see a rise from 4.2 % to 7.three %.
Yadvinder Singh Guleria, Director Gross sales and Advertising, Honda Motorbike and Scooter India, stated, “Banking is likely one of the most vital enablers for us. With a few measures taken by the RBI and the central authorities, it’s crucial that they (banks) can be extending loans to two-wheeler patrons, which was not seen until August”.
Not solely are patrons discovering it robust to safe loans to purchase two-wheelers, even sellers usually are not discovering it straightforward to get banks to finance their stock. Of all of the automotive segments solely the passenger automobile and tractor segments have bounced again recording a development in retail volumes throughout September.
“The uncertainty round demand is forcing banks to consider that sellers will discover it robust to repay the working capital necessities we search from them. This case received’t get again to regular at the very least earlier than February subsequent 12 months,” stated a Mumbai-based two-wheeler seller.