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

2nd

Small cars

3rd

Commercial Vehicles

4th

Key Drivers of growth of Auto Industry

Low Car Penetration

Rising Family Income

Changing Lifestyle Finance Availability

Rapid Urbanization

Growth Trend

Annual Disposable Income (US$ billion)

Consumer Expenditure (US$ billion)

New Registrations of Passenger Cars ('000)

2,141.0

1,867.2
1,530.5 1,362.8 1,095.4 1,356.1 951.1

1,946.4 1,628.7 1,155.4

1,078.9

768.0

2009

2010

2011

2012

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

Indias 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 Features

Loan Amount Tenure Service charges Minimum 1L Maximum depends upon model variants 1 to 5 years <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.350/+ Rs.350/+ Rs.350/+ Rs.350/+ 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 Up to 2 yrs 2 yrs 3 yrs Above 3yrs INTEREST RATE 15.75% - 17.00% p.a. 13.75% - 16 % p.a. 11.5% - 14.75% p.a.

Used Car

New Car Loan

For all tenure

16.50% -18.50% p.a.

ICICI: Eligibility Criteria

Particula Salaried rs 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.

Minimum PAT (profit after tax) of Rs. 2.00 lakhs. more than 3 years. Minimum PAT (profit after tax) of Rs. 2.00 lakhs more than 3 years.

Income

Gross annual income of at least Rs. 2.50 lakhs

Gross annual income of at least Rs. 2.00 lakhs. more than 3 years.

Stability

employment stability -more than 2 years and current employment stability -minimum 1 year.

Categorization for new car loans

Category A+ B+ C Cars Audi, Porsche, Bentley Nissan Micra, Honda Civic 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 wont 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 Bank
Loan Features:
Loan Amount Borrow up to 3 6 times of annual income Tenure Up to 60 Months Up to 2.5 Lakhs: Rs 2625 Over Rs 2.5 Lakhs to 4 Lakhs : Rs 3650 Over Rs 4 Lakhs to 5 Lakhs : Rs 4100 Over Rs 5 Lakhs to upto 10 Lakhs : Rs 4450 Over Rs 10 Lakhs : Rs 4950 Up to 100% for new cars LTV Up to 80% value of car for used car

Processing Fee

HDFC : INTEREST RATE

Loan scheme TENURE 12 months up to 3 years INTEREST RATE 11.25% - 12% p.a.

New Car Loan

Above 3yrs
Up to 2 years

11.50% - 12.25% p.a.

15.75% - 18.25% p.a.

Used Car

Above 2 yrs 15.75% - 17.75% p.a.

HDFC : Eligibility Criteria

Salaried
Age 21 - 65 Years

Self Employed
21-65 Years

Income Net Annual Income above Rs,100000

Net Annual Income Rs,60000 and minimum turnover of Rs4,50,000 per annum Be in business for at least 3 Years

Job Ex

Had a job of 2 years and Minimum of 1 Year at current working place

AXIS Bank
Loan Features:
Loan Amount Loans offered from Rs. 1 lakh
Tenure Processing fees 1 year to 5 year Rs. 3500 to Rs. 5500 Up to 90% of the ex-showroom price on selected models

LTV

Interest rate

12.5% to 15.00%

AXIS Bank : Eligibility Criteria

Salaried
Age 21-60 Years

Self Employed
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 As per latest ITR and computation of income Minimum 3 years in same line of business

Income As per latest salary slip or Eligibility Form 16 Employm Minimum 2 years of ent continuous employment

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 10200/85% of 'On Road Price' of car (includes registration, insurance and cost of accessories worth Rs 25000).

LTV

90% in case of Corporate Salary Package accounts

STATE BANK OF INDIA : INTEREST RATE

Loan scheme TENURE All tenure INTEREST RATE For term loan :10.75% p.a.

Pre-owned New Car Used Car Car Loan

All tenure Up to 3 years

For overdraft : 10.75% p.a. 17.25% p.a.

Above 3 yrs 17.50% p.a. Up to 3 years 16.00% p.a.

Above 3 yrs 16.50% p.a.

SBI : Eligibility Criteria

Salaried
Age 21-65 Years

Self Employed
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
Processing fees LTV

For new vehicle 84 months For old vehicle-60 months

@ 1% of the loan amount, with a maximum of Rs.6,000 For new vehicle 85% For old vehicle-70%

PNB interest rates

BPLR (For less than 3 yrs.) BPLR (for above 3 yrs) 10.50%

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 value 85% of old car value 12months-60 Months For new car-90% For old car 85%

Tenure LTV

Citi Bank Interest Rates

Features For New Car 13.25%

For old Car

16%

Citi Bank Eligibility

Salaried Salary-Rs. 8000 Age 21-58 Income-Rs.60000 Age 21-65

Self employed

Interest Rate Upto 3 years

15.75%

14%
11.75% 10.75% 12%

13.25%

SBI

HDFC

PNB

ICICI

AXIS

CITI

Processing Fees : Comparison

SBI
0.51% of Loan Amt Min: 1020 Max: 10200

HDFC
< 2.5 L: Rs 2625 Rs 2.5 - 4 L: Rs 3650 Rs 4 - 5 L : Rs 4100 Rs 5 10 L: Rs 4450 >Rs 10 L : Rs 4950

PNB
@ 1% of the loan amount, with a maximum of Rs.6,000

ICICI <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/-

AXIS
Rs 3500/To 5500/NA

CITI

NBFCs
Non Banking Financial Corporations. Financial Institution. Not allowed to take deposits from public. Not regulated by RBI.

NBFCs as Competitors
Mahindra & Mahindra financial services Ltd Kotak Mahindra Prime Ltd Tata Finance Ltd Shriram Transport Finance Company Ltd Sundaram Finance Ltd.

2010

2011

Conclusion
Only 4% Indian population owned cars. HDFC is market leader in auto loans. SBI is giving head to head competition to HDFC. NBFCs providing healthy competition to Banks. Auto finance industry has grown at the rate of 13% over the last 5 yrs.