Indian auto market has more than 35 financers that offer auto financing solutions to the intended car buyers. Being one of the fastest growing automobile markets in the world, the Indian automobile market has got so much of potential and hence a number of auto finance companies have come up to tap the booming market. It can be added here that the passenger vehicle market constitutes almost 80% of automobile sales. In 2008, the stock passenger car was about 11 per 1,000 people. The production of passenger vehicle is further expected to go up at a CAGR of about 10% from 2009-10 to 2012-13. So, sensing this market potential, many financial companies in India have given special attention on auto financing.
During the 2000s, the auto finance in India was dominated by private banks, when Citibank was the market leader. But its market share dropped from 27 per cent during 90s to less than 8 percent during early 2000. ICICI Bank became the new leader with almost 29.2 per cent market share during 2003-04. The journey continued till 2008 when HDFC bank took the lead. However, the current trend shows that the PSU banks like SBI, PNB, Bank of Baroda, Bank of India, Canara Bank, Syndicate Bank and Union Bank etc. are leaving behind their private sector counterparts in the Rs. 22,000 crore passenger car and 2-wheeler loan market. The reason behind this is the fact that, private banks have been compelled to reduce their exposure to the sector owing to increased delinquencies.
List of Top Auto Finance Companies in India
Following is the list of top auto finance companies in India:
- State Bank of India
State Bank of India (SBI) is one of the leaders in the auto finance segments in India. Recently it has slashed down its rate of interest for the new cars, which, in turn, has attracted a number of customers. Its long repayment option and extensive network of more than 12,150 branches have also made it quite popular among the customers. Recently SBI has inked a deal with General Motors for car finance. In 2008-09, SBI registered a net profit of Rs. 9,121 crore, which was 35.55% bigger than the last financial year's profit of Rs. 6,729 crore.
- ICICI Bank
ICICI Bank was the market leader in auto finance in India till 2008. Though currently not on the top, it still remains amongst the top 10 auto finance companies in India. However, to regain its lost reign, ICICI Bank is putting car loans on fast track. In the current financial year, ICICI Bank has doubled auto loan disbursement amount to more than 1,500 crore, comparing to the last financial year (ended March 2009). ICICI Bank registered a net income of Rs. 35,769.5 million in the last financial year (ended March 31, 2009).
- HDFC Bank
HDFC Bank is a market leader in auto finance in India. In order to stay in the race of dominating Indian auto finance market, HDFC Bank also cut down the rate of interest for its car loan. In the financial year 2008-09, HDFC Bank registered a profit of Rs. 2,444,93 lacs, comparing to Rs. 1,590,18 in the previous financial year.
- Bajaj Auto Finance Limited (BAFL)
Bajaj Auto Finance Ltd is one of the leading auto finance companies in India. Offering a diverse array of financial products to its clients ranging from two wheeler loans to other loans like consumer durable loans, business loans and many more, BAFL also offers free personal accident insurance to its clients. It has an extensive network of 50 branch offices and more than 6000 consumer durable dealerships. In the financially year 2008-09, BAFL registered a profit (after taxation) of Rs. 339.1 million, comparing to previous year's profit of Rs. 201.2 billion.
- Citibank
Once a market leader in auto financing in India, Citibank offers automobile financing to its clients through its extensive dealership network across the country. One of the leading players in the market, Citibank offers a range of auto financing options for the customers. For the year ended March 31, 2009, Citibank registered a net profit (after tax) of Rs. 2,173 crore, which was 20% higher than its previous year's profit of Rs. 1,804 crore.
- Bank of Baroda
Bank of Baroda offers specially-designed car loans for the customers so that it meets their demands, status and taste. Loans are offered for new as well as used cars. Bank of Baroda also offers a unique facility for installation of CNG/LPG Gas-kit in the cars. Unique features and low interest rates are USPs of Bank of Baroda car loans. In 2008-09, Bank of Baroda registered a net profit of 2,227.20 crore, comparing to the net profit of Rs. 1,435.52 crore in the previous financial year.
- Punjab National Bank
Punjab National Bank, a renowned leader in the field of auto finance market in India, offers auto loan for new as well as old vehicles of not older than 3 years. Loans are also offered for purchase of vehicles of foreign/indigenous makes. In September 2009, PNB tied up with Mahindra and Mahindra for financing their vehicles across the nation. PNB registered a net profit of Rs. 3,090,88 lacs in the year ended March 31, 2009.
- Kotak Mahindra Prime Limited (KMPL)
Kotak Car Finance has crafted a niche in the Indian auto finance market through its flexible schemes, hassle-free documentation and quick processing. KMPL finances new as well as used cars. In 2008-09, KMPL registered a net profit (after tax) of Rs. 1,570 million.
- Sundaram Auto Finance
Sundaram Auto Finance is one of the market leaders in the auto finance market in India. Founded in 1998, this company extends finance in all models of cars. Customers can choose from a range of vehicle and finance packages offered by the company. It also has an extensive network of more than 400 branches across the nation. Sundaram finance registered a consolidated net profit of Rs. 15073.14 lakhs in 2008-09.
- United Bank of India
United Bank of India is one of the leading auto finance companies in India offering range of car financing options to the customers. It offers car loan for new cars as well as for used cars. In 2008-09, UBI registered a net profit of Rs. 18470.96 lakhs.
- Canara Bank
Canara Bank offers attractive interest in the auto loans for its customers. From August 2009, Canara Bank further reduced its auto loan rates to woo customers. Canara Bank registered a net profit of Rs. 2072 crore in 2008-09, which saw a 32.4% rise from previous year's net profit of Rs. 1565 crore.