auto loan industry(3)

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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