Czech car maker SkodaAuto is all set to launch its finance arm — Skoda Finance — in the country by the year-end. The European company’s move was prompted by the financial credit crunch due to tightening of lending norms by banks and other financial institutions in addition to steep interest rates.
Thomas Kuehl, member of board sales and marketing, SkodaAuto India, said, “Since 80 per cent of our total sales take place on finance, we have decided to launch Skoda Finance in the country. It should be operational by the last quarter of this year.”
SkodaAuto sells four models in the country, including the Fabia hatchback, the Octavia, Laura and Superb sedans in the price range of Rs 4.8 lakh to Rs 24 lakh. The finance outfit will offer competitive interest rates to attract customers, Kuehl said.
Since Fabia’s launch early this year, the company’s sales have risen by more than 74 per cent with actual sales of almost 8,000 units till last month. Spiralling interest rates in the auto segment has forced some domestic auto companies to look for alternative finance options to tide over the current situation.
Some companies like Bajaj Auto, Tata Motors, Maruti Suzuki, Hero Honda, Mahindra and Mahindra are focussing on non-banking financial companies to help accelerate sales, especially in the current lean season. The move is also aimed at increasing sales in the upcoming festive season. Hero Honda, the world’s largest two-wheeler manufacturer, has tied up with Fullerton India, a non-banking finance company (NBFC), to support financed purchases.
SkodaAuto is preparing to introduce at least four new models in the market next year, two of which will be replacement models. The company is gearing up to launch the new Superb by January, followed by the all-new Laura, the Fabia Sports and Fabia Combi. The company expects to shut completely knocked down (CKD) assembly operations of the current Superb by next month.