The new initiative is critical as a single associate like State Bank of Patiala has 748 branches and a large customer base. Earlier, the tie-up with SBI, which has over 9,000 branches, has already given MUL access to unrepresented, remote parts of the country where the car financing is not available through any organised channel.
National Rollout Takes Off
New Delhi, June 29: The SBI alliance is being extended to New Delhi by July-end. Beginning with the initial pilot launch in 37 cities, the SBI venture is currently operational in 80 cities.
MUL has identified consumer financing as a centerpiece of its marketing strategy to secure accelerated growth in the competitive passenger car market. During the IPO roadshows, MUL managing director had indicated that the company was targeting to convert one per cent of the two-wheeler consumer base (market size: around five million units a year) every year to the Maruti family, especially through competitive and extensive car financing.
Mr Khattar has argued that through the SBI network, with the rate of interest of 10.5 per cent, loan tenure of 5-7 years, the EMI of Rs 2,600 - Rs 2,700, one can buy a Maruti 800 just by paying 50 per cent of what one would pay upfront for a two-wheeler on the basis of future savings. Two-wheeler consumer financing is done in only 50-60 cities; in other cities, two-wheeler customers pay upfront the entire money, Mr Khattar had pointed out. In two-wheelers, the total financing may be 30-33 per cent, the rate of interest ususally around 16-17 per cent and a tenure of around two years, he had said.