Car and two-wheeler auto makers in India are offering 100% finance on vehicle purchases and alternate payment facilities at workshops as customers disappear due to the sudden liquidity crunch in the aftermath of the government’s currency ban.
Indian industry executives say that footfalls have come down by 20-25% at showrooms since the currency ban of Rs 500 and Rs 1,000 currency notes on November 8. Conversion rates from enquiries to sales, too, have slowed down.
In Delhi, registration of new vehicles at regional transport office (RTO) dropped as much as 70% between November 9 and 13, ET Auto reports.
Jnaneswar Sen, senior vice-president (sales & marketing) at Honda Cars India said: “The variation in decline in footfalls is huge. In upcountry areas, where consumers are dependent on the agricultural economy, the effect is more severe. It is difficult to arrive at a nationwide average as depending on the region, the drop in footfalls can range anywhere between 10-50%.”
To woo buyers back, Honda has tied up with HDFC Bank, Axis Bank and ICICI Bank to offer 100% financing to customers on its vehicles.
Hyundai is offering 100% on-road price financing through HDFC, Kotak and Axis banks besides offering 100% funding on ex-showroom prices through ICICI Bank and some other banks.
“In addition to this, we are lining up aggressive offers to excite customers to not hold back purchases,” said Rakesh Srivastava, senior vice-president (sales & marketing) at Hyundai Motor India.
N Raja, senior vice-president (sales & marketing) at Toyota Kirloskar Motor (TKM), confirmed that it’s taking longer to convert enquiries into purchases. “We have not seen any cancellations as far as bookings are concerned but customers are buying time to take deliveries,” he said.
Besides offering 100% financing through Toyota Financial Services (TFS), ICICI Bank and Axis Bank, Toyota has directed all its dealers to offer alternate payment options through platforms such as Paytm, Mobikwik and Citrus for servicing needs.
Maruti Suzuki has also come forth with schemes offering zero down payment on vehicle purchases and is offering savings of up to Rs 1 lakh on models like the Celerio.
Inadequate availability of liquid cash has to an extent led to delays in dispatches as truckers have got stranded, running out of valid currency notes to make payments for food, fuel and toll.
“The centre has exempted toll payments on national highways, but not on state highways and certain other roads, for instance, on the NICE corridor (Bengaluru-Mysore infrastructure corridor),” a senior industry executive told ET Auto on condition of anonymity. “Apart from fuel and toll expenses, drivers need cash for food, etc. Truckers work on a rotational basis and initially there were hiccups in dispatches but these are now easing gradually.”
It remains to be seen whether the delays have any impact on the wholesale numbers in the auto industry for the month.
In the two-wheeler industry, industry executives said, dispatches have dropped by 20-30%.