International rating agency Fitch today said auto loans fared better in the September quarter on the back of recovery in Indian economy.
"The domestic auto ABS (asset-backed securitisation) delinquency level (was) off in the September quarter," the agency said in a note.
It, however, did not give the exact number on the delinquencies in the reporting quarter. "The delinquency rate was mostly stable in Q3 (of CY2014), in contrast with the rapid rise to 3.9 per cent in December 2013 and the steady climb in H1 of the current fiscal."
According to Fitch, the upturn in economic growth, which helps the commercial vehicles the most, is one of the primary reasons for the stability in performance of the auto loan repayments.
Fitch expects India's GDP growth, which came at 4.7 per cent and 4.5 per cent in FY14 and FY13, respectively, to increase to 5.5 per cent this fiscal. In Q1, the economy expanded by 5.7 per cent.
The agency said tighter underwriting and collection standards also helped in stabilising the delinquency rates.
"Tighter underwriting and collection include setting lower loan-to-value criteria, reviewing maximum loan tenors, enhancing collection and servicing techniques."
Auto sales have also been picking in recent months after de-growing throughout last fiscal, indicating improved consumer sentiment.
As per the Society of Indian Automobile Manufacturers, in August car sales jumped 15.16 per cent to 1,53,758 units compared to 1,33,513 in the same month of 2013. Motorcycle sales during the month grew 14.45 per cent to 9,10,312 units as against 7,95,411 in August last year.
In September, too, auto sales rose with Maruti Suzuki, Hyundai, Honda, Toyota and M&M reporting good growth ahead of the festive season. However, Tata Motors, GM and Ford reported decline in sales.
