Maruti Udyog ties up with 8 auto finance companies

ENS ECONOMIC BUREAU

MUMBAI, JANUARY 7: In a cartel formation of sorts, Maruti Udyog Ltd has brought eight leading auto financiers under a single umbrella called Maruti Finance to offer a common interest rate to all its car customers instead of these finance firms undercutting each other.

The new Maruti partners are: ABN Amro Bank, HDFC Bank, ICICI, Kotak Mahindra, Standard Chartered Bank, Sundaram Finance besides MUL’s existing joint ventures partners Citicorp and Country-wide.

Previously, all auto financiers were competing with each other to offer competitive interest rates to all the Maruti customers. Under the new arrangement, all direct sales agents of auto financiers would be scrapped with all the companies offering same interest rates to MUL customers which generates a business of Rs 6,000 crore per annum for auto financing.

Addressing a news conference here today, MUL managing director Jagdish Khattar said Maruti would offer various benefits to those customers who avail of loans from Maruti Finance. These include extended warranty, additional service, finance for car insurance and for accessories.

The first Maruti Finance desk will be set up in Mumbai to be followed by other cities in the country. A customer, if he wants, can take a loan from other companies also outside this arrangement, Khattar clarified.

Khattar said three companies would be allotted to each dealer where rest of the alliance partners will not fund any Maruti car. Maruti Finance would roll out in the rest of the country over the next six months, he added.