Shriram Transport Finance Company (STFC) has forayed into second hand truck finance through a new subsidiary Automall. The subsidiary has been set up as a trading company to extend finance for truck owners to replace their old vehicles.
R Sridhar, managing director, STFC, told reporters on the sidelines of Automall launch, “We want to create the replacement demand for new vehicles and address the vacuum of financing in the pre-owned truck financing.”
Presently, the average age of a truck is 10-11 years in India, compared to 5-6 years in developed countries. The industry is estimated to be around Rs 1 lakh crore in India. “We have great potential in this space,” said Sridhar
Replacement is sluggish because the cost of replacement is prohibitive and replacement finance is not available easily. “We are trying to rectify the situation. We are the only organised credit provider for second-hand trucks.”
“Presently, we don’t give warranty. The company is in talks with various other companies to offer the same for engines and gear box,” he added.
The other initiative launched was Shriram One Stop, a computerised touch screen kiosk which will be a virtual truck bazaar, will provide information about used commercial vehicles available for sale.
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“This will bring more transparency while buying and selling used commercial vehicles. These will be set up in all the 482 branches of the company spread across the country in a phased manner.” Under the second initiative old trucks of all makes will be acquired from the market and will be refurbished and sold under the brand name Shriram Newlook with their commercial value enhanced.
STFC, in the last 30 years Shriram, has helped replace nearly two million trucks by providing affordable acquisition credit to the small truck operators, freeing them from the clutches of the unorganised sector and in the process speeding up the modernisation of the national truck fleet, he added.
The company is also planning to join hands with a NGO to train school drop outs for driving LCVs. “The programme will be funded by STFC and we will also help them to get driving licence.”