auto loan industry(3)
TRANSCRIPT
AUTO LOAN INDUSTRY
Presented By:
Aakanksha Mathur
Mounika Palreddy
Neha Saini
Nikhil Deshmukh
Teena Bansal
Vinay Pratap Singh
Automobile Industry
• Indian automobile sector has huge potential.• India's passenger car and commercial vehicle
manufacturing industry is the sixth largest in the world
• The industry has a turnover of more than USD $35 billion
• Provides direct and indirect employment to over 13 million people.
Indian Auto industry : Among the top ten in the World
Two Wheelers
Small cars
Commercial Vehicles
2nd
4th
3rd
Key Drivers of growth of Auto Industry
Low Car Penetration
Rising Family Income
Changing Lifestyle
Finance Availability
Rapid Urbanization
2009 2010 2011 2012
1,095.4
1,356.11,530.5
1,628.7
768.0951.1
1,078.9 1,155.41,362.8
1,867.2 1,946.42,141.0
Growth Trend Annual Disposable Income (US$ billion)
Consumer Expenditure (US$ billion)
New Registrations of Passenger Cars ('000)
Growth Forecast of Indian Auto Industry
• Passenger car production in India is projected to cross three million units in 2014-15.
• Sales of passenger cars during 2008-09 to 2015-16 are expected to grow at a CAGR of around 10%
• India is projected to be among top five automotive economies by 2025.
• Automotive Mission Plan (AMP), aims to make automobile industries' contribution to GDP more than 10% while providing employment to 2.5 Cr people.
Auto Loan Industry
• India’s auto finance industry is estimated at Rs. 60,200 crore for FY2011.
• HDFC lends up to 1500 Cr per month on vehicle loans, holding a share of 22% in market.
• SBI bank has 19% market share.• SBI became aggressive in this industry by
cutting interest rate to minimum 10.75% by 50 bps.
• ICICI was market leader in auto loans till early 2008.
Top Auto Finance Companies in India
• Following is the list of top auto finance companies in India.– State Bank of India– HDFC Bank– ICICI Bank– Punjab National Bank– Axis Bank– Citibank
ICICI: Loan FeaturesLoan Amount Minimum 1L
Maximum – depends upon model variants
Tenure 1 to 5 years
Service charges <2.5 L : Rs.2500/- + Rs.350/-2.5 to 3.9 L : Rs.3500/- + Rs.350/-4 L to 4.9 L : Rs.4000/- + Rs.350/-5 L to 9.9 L : Rs.4200/- + Rs.350/->10 L : Rs.5000/- + Rs.350/-
Pre Payment Charges
5% on the principal outstanding or interest outstanding for unexpired period of loan
LTV 90 % on Ex showroom price
ICICI : INTEREST RATE
Loan scheme
TENURE INTEREST RATE
New Car Loan
Up to 2 yrs 15.75% - 17.00% p.a.
2 yrs – 3 yrs 13.75% - 16 % p.a.
Above 3yrs 11.5% - 14.75% p.a.
Used Car For all tenure
16.50% -18.50% p.a.
ICICI: Eligibility CriteriaParticulars
Salaried Individuals Self –Employed Individuals
Partnership Firm
Private/ Public Ltd Co
Age 25 yrs- 58 yrs 28 yrs- 65 yrs Existence for at least 3 years.
Income Gross annual income of at least Rs. 2.50 lakhs
Gross annual income of at least Rs. 2.00 lakhs.
Minimum PAT (profit after tax) of Rs. 2.00 lakhs.
Minimum PAT (profit after tax) of Rs. 2.00 lakhs
Stability employment stability -more than 2 years and current employment stability -minimum 1 year.
more than 3 years.
more than 3 years.
more than 3 years.
Categorization for new car loans
Category Cars
A+ Audi, Porsche, Bentley
B+ Nissan Micra, Honda Civic
C Maruti, i10
For new car loan customers can directly go to any icici bank branch and can apply for loan but for used car or old car loan customer has to go their headquarters and form their they can apply for loans which are located in every city. They won’t entertain any customer for old or used car loan at any icici bank branch.
Ways to apply for loans:•Online.•Through dealers.•Customers can directly approach them.•They are having tie ups with various automobile manufactures form their they are directly attracting their customers.
HDFC BankLoan Features:
Loan Amount Borrow up to 3 – 6 times of annual income
Tenure Up to 60 Months
Processing Fee
Up to 2.5 Lakhs: Rs 2625Over Rs 2.5 Lakhs to 4 Lakhs : Rs 3650Over Rs 4 Lakhs to 5 Lakhs : Rs 4100Over Rs 5 Lakhs to upto 10 Lakhs : Rs 4450Over Rs 10 Lakhs : Rs 4950
LTV
Up to 100% for new cars
Up to 80% value of car for used car
HDFC : INTEREST RATELoan
schemeTENURE INTEREST RATE
New Car Loan
12 months up to 3 years
11.25% - 12% p.a.
Above 3yrs 11.50% - 12.25% p.a.
Used Car
Up to 2 years
15.75% - 18.25% p.a.
Above 2 yrs 15.75% - 17.75% p.a.
HDFC : Eligibility Criteria
Salaried Self Employed
Age 21 - 65 Years 21-65 Years
Income Net Annual Income above Rs,100000
Net Annual Income Rs,60000 and minimum turnover of Rs4,50,000 per annum
Job Ex Had a job of 2 years and Minimum of 1 Year at current working place
Be in business for at least 3 Years
AXIS BankLoan Features:
Loan Amount Loans offered from Rs. 1 lakh
Tenure 1 year to 5 year
Processing fees
Rs. 3500 to Rs. 5500
LTV
Up to 90% of the ex-showroom price on selected models
Interest rate12.5% to 15.00%
AXIS Bank : Eligibility CriteriaSalaried Self Employed
Age 21-60 Years 21-65 Years
Income Min. Net Annual Salary of Rs 1.5 lac p.a. for selected models and Rs. 2.5 Lac p.a. for others
Min. Net Annual Business Income of Rs 1.5 lac p.a. for selected models and Rs. 2.5 Lac p.a. for others
Income Eligibility
As per latest salary slip or Form 16
As per latest ITR and computation of income
Employment
Minimum 2 years of continuous employment
Minimum 3 years in same line of business
Loan Features:
Loan Amount 4 times of Net Annual Income can be sanctioned.
Tenure Up to 84 Months
Processing Fee
0.51% of loan amount, minimum Rs 1020/- and Maximum Rs 10200/-
LTV
85% of 'On Road Price' of car (includes registration, insurance and cost of accessories worth Rs 25000).
90% in case of Corporate Salary Package accounts
STATE BANK OF INDIA : INTEREST RATELoan
schemeTENURE INTEREST RATE
New Car Loan
All tenure For term loan :10.75% p.a.
All tenure For overdraft : 10.75% p.a.
Used Car
Up to 3 years
17.25% p.a.
Above 3 yrs 17.50% p.a.
Pre-owned
Car
Up to 3 years
16.00% p.a.
Above 3 yrs 16.50% p.a.
SBI : Eligibility Criteria
Salaried Self Employed
Age 21-65 Years 21-65 Years
Income Net Annual Income Rs. 250,000/- and above
Net Annual Income Rs. 250,000/- and above
Job Ex 2 Years in State / Central Government, Public Sector , Private company .
3 Years
Punjab National Bank
features
Loan Amount 25 times of the monthly net salary or Rs.25 lacs (for one or more vehicles), whichever is lower.
Tenure For new vehicle – 84 monthsFor old vehicle-60 months
Processing fees
@ 1% of the loan amount, with a maximum of Rs.6,000
LTV For new vehicle – 85%For old vehicle-70%
PNB interest rates
BPLR (For less than 3 yrs.)
10.50%
BPLR (for above 3 yrs)
11.00%
Base Rate BR+1.50% (BR=10.50%)
PNB Eligibility Criteria
• Individuals as well as Business Concerns (Corporate or non-corporate).
• Minimum net monthly salary / pension / income – 20000/-. Income of spouse /Parent can be added.
Citi Bank
Features
Loan Amount 90% of New car value85% of old car value
Tenure 12months-60 Months
LTV For new car-90%For old car 85%
Citi Bank Interest Rates
Features
For New Car 13.25%
For old Car 16%
Citi Bank Eligibility
Salaried Salary-Rs. 8000Age 21-58
Self employed Income-Rs.60000Age 21-65
SBI HDFC PNB ICICI AXIS CITI
10.75%11.75% 12.00%
15.75%
14.00%13.25%
Interest Rate Upto 3 years
Processing Fees : Comparison
SBI HDFC PNB ICICI AXIS CITI
0.51% of Loan AmtMin:1020Max:10200
< 2.5 L: Rs 2625Rs 2.5 - 4 L: Rs 3650Rs 4 - 5 L : Rs 4100Rs 5 – 10 L: Rs 4450>Rs 10 L : Rs 4950
@ 1% of the loan amount, with a maximum of Rs.6,000
<2.5 L : Rs.2500/-2.5 to 3.9 L : Rs.3500/- 4 L to 4.9 L : Rs.4000/- 5 L to 9.9 L : Rs.4200/- >10 L : Rs.5000/-
Rs 3500/-To 5500/-
NA
NBFC’s•Non Banking Financial Corporations.•Financial Institution.•Not allowed to take deposits from public.•Not regulated by RBI.
NBFC’s as Competitors
• Mahindra & Mahindra financial services Ltd• Kotak Mahindra Prime Ltd• Tata Finance Ltd• Shriram Transport Finance Company Ltd• Sundaram Finance Ltd.
2010 2011
ConclusionOnly 4% Indian population owned cars.HDFC is market leader in auto loans.SBI is giving head to head competition to HDFC.NBFC’s providing healthy competition to Banks.Auto finance industry has grown at the rate of 13% over the last 5 yrs.
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