Tata, M&M auto finance arms eye foreign mart

The auto-finance subsidiaries of auto majors such as Tata Motors (Tata Motorfinance) and Mahindra & Mahindra (Mahindra Finance) are planning to tap overseas market.

"We would like to provide Tata Motors' overseas customers with attractive financing options. The company is evaluating the possibility of setting up branches in markets such as Korea, Africa and Sri Lanka," said Aubry Rebello, chief, Tata Motorfinance.

Similarly, Mahindra Finance is studying markets such as West Asia and Africa for vehicle financing. "M&M is studying the option of opening overseas branches. As our focus is on rural areas, we would like to set up our branches in the rural parts of M&M's overseas markets," said V Ravi, chief financial officer, Mahindra Finance.

According to industry analysts, having branches overseas will help these companies get more customers for their vehicles.

Tata Motorfinance is believed to set up about 20 branches abroad in two years, they said. The company is thumping on its well performing products such as one tonne truck Ace and Rs 1 lakh car, which will be out by early 2008. Mahindra Finance would also like to finance non-Mahindra products.

"Initially, we would like to go ahead with our own products overseas. Later we would like to finance vehicles and products of other companies as well," said Ravi. In India, 30 per cent of products financed by Mahindra Finance are non-Mahindra vehicles.

At present, Tata Motorfinance has 70 domestic branches, which will be expanded to 165 branches by the end of this year. The company has targeted to set up 500 branches by 2009. Mahindra Finance has 305 branches, expecting to add 50 branches every year.

Market analysts have estimated Tata Motors to sell 300,000 units of the Rs one lakh-car during the the initial year of the launch. By 2010, one million one lakh cars are estimated to be sold in the domestic and international markets.