MUMBAI (Reuters) - India's largest commercial vehicle financier, Shriram Transport Finance Company Ltd , plans to expand its nascent car lending portfolio to cover the entire country over the next 18 months as its core market continues to struggle amid a slowing economy.
The company, which largely finances trucks, buses and tractors, started focusing on this segment six months ago. Out of the total $8 billion assets under management, heavy commercial vehicles account for 40 percent, outlook for which continues to be grim.
"Right now it (car lending) is in some markets where we have a strong customer base," Managing Director Umesh Govind Revankar told Reuters.
"It is gradually growing every quarter, so we keep adding new areas. And maybe ... around 18 months we should be able to cover all India," he added.
Shriram, whose holding company is awaiting approvals for setting up a new bank in the country, currently finances cars in some western and southern states such as Gujarat and Maharashtra.
Competition in the car lending segment is intensifying as more banks enter newer areas, especially in rural and semi-urban markets where financing has been scarce.
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Revankar said he was seeing delays in payments from borrowers of heavy and medium commercial vehicles, while loan demand continued to be weak. He expects asset growth to remain flat at around 10 percent in the year to March 31.
Sales of medium and heavy commercial vehicles have fallen 26 percent in the April to January period, according to data from the Society of Indian Automobile Manufacturers.
(Reporting by Aradhana Aravindan and Swati Pandey; Editing by Anupama Dwivedi)