Canon India, a leading consumer durables and IT hardware company, has laid out a budget of $5-10 million for consumer financing, as the liquidity crunch in the country is affecting the company’s sales.
“We will invest $5-10 million for consumer and dealer financing by the second quarter of calendar year 2009,” said Kensaku Konishi, president and CEO, Canon India. He added that the investment will be funded through Canon Singapore.
As reported by FE earlier, the Japanese company had planned to set up a division that would deal with financing related activities. This is on lines of its operations in countries like Australia and Canada, where Canon has a separate company to take care of all its financing and leasing related work.
“Though we are not immediately setting up a subsidiary, a division for this purpose will see the light of the day by the second quarter,” said Alok Bharadwaj, senior vice president, Canon India.
Presently, the company has a tie-up with ICICI Bank for financing consumers. However, he added that the recent risk avoidance of banks in lending is one of the key reasons behind the move.
“Last year, we grew 31% compared to 2007. This year, we are suffering a little because of the economic situation, but we will clock at least 25% growth,” Konishi said.
The company expects to register revenues of Rs 850- 900 crore in 2009.
Canon also plans to hire 100 people this year, taking the total head count in India to 800. Despite the slowdown, the company is still betting big on the Indian market and plans to launch 100 new products in 2009.