Indian Automobile Retail Finance Industry Outlook

Published by: CRISIL Ltd.

Published: Sep. 1, 2007 - 80 Pages

Table of Contents

Sections

Executive summary

1.0 Cars and utility vehicles finance industry

Introduction

Outstanding portfolio to almost double by 2011-12

Disbursements in new cars and UV finance market to remain flat

in 2007-08

Interest rate environment and its effect on financial variables

Underlying asset market to grow at a slower rate than in the past

Used car market

2.0 Commercial vehicles finance industry

Introduction

Outstanding portfolio to double, tenures to increase

New CV finance market to grow in single digit;

Used CV market to drive growth

Interest rate environment and its effect on financial variables

Underlying asset market to be a drag on finance market growth

3.0 Two-wheeler finance industry

Introduction

Outstanding portfolio to grow at a slower rate than other segments

Disbursements to decline by 14 per cent in 2007-08

Interest rate environment and its effect on financial variables

Underlying asset market to witness slower growth

4.0 Car leasing and rental industry

Introduction

Car leasing industry

Value chain

Current and projected market size

Major drivers of the leasing industry (operating lease)

Comparison - Outright purchase vs operating lease

Car rental industry

Value chain

Current market size

Major drivers for the car rental industry

Projected market size

Industry profitability

Company profiles

Annexure

Charts

4.0 Car leasing and rental industry

01 Value chain for car leasing industry

02 Share of customers in total car sales (2005-06)

03 Value chain for the car rental industry

04 Calculation of rent

Figures

1.0 Cars and utility vehicles finance industry

01 Interest rate and yield

02 Drivers for new car finance market

03 Drivers for new UV finance market

04 Car finance vs car market

05 UV finance vs UV market

2.0 Commercial vehicles finance industry

01 Interest rate and yield

02 Drivers for the new CV finance market

03 CV finance vs CV market

3.0 Two-wheeler finance industry

01 Interest rates and yield

02 Drivers of two-wheeler finance market

03 Two-wheeler finance vs two-wheeler markets

4.0 Car leasing and rental industry

01 Percentage benefits from changes in base case variables

Tables

1.0 Cars and utility vehicles finance industry

01 Growth in outstanding portfolio

02 Growth in disbursements

2.0 Commercial vehicles finance industry

01 Growth in outstanding portfolio

02 Growth in disbursements

3.0 Two-wheeler finance industry

01 Growth in outstanding portfolio

02 Growth in disbursements

Tables

4.0 Car leasing and rental industry

01 Current market size

02 Projected market size (2011-12)

03 Outright purchase vs operating lease

04 Average rent for different classes

05 Current market size

06 Growth in overall non-metered rental industry

07 Growth for organised market in non-metered rental industry

08 Profitability analysis

09 Loan vs lease

10 Difference between operating and financial lease

Section

High interest rates to adversely impact housing finance industry

Executive summary

1.0 Disbursements

Introduction

Disbursements estimated to grow by 15 per cent CAGR over the next

5 years

Finance penetration

Average ticket size

Opportunity cost arbitrage

Mortgage to GDP lowest among the region

Conclusion

2.0 Outstandings

Introduction

Prepayments

Last 2 years’ disbursements form more than 50 per cent of

outstanding in 2006-07

Huge scope for home equity loans

Conclusion

3.0 Market trends

Interest rates

Net profitability margins

Non-performing assets

Sources of fund

Market share

Charts

1.0 Disbursements

01 Factors influencing disbursements

2.0 Outstandings

01 Factors influencing outstanding

02 Types of prepayment

Figures

1.0 Disbursements

01 Finance penetration

02 Average ticket size for new houses

03 Loan to value ratio

04 Housing finance rates

05 5-year fixed deposit rates

06 Effective interest rates

07 Mortgage to GDP Ratio (2006)

2.0 Outstandings

01 Prepayments

02 Age mix of outstanding portfolio

3.0 Market trends

01 Interest rate movement

02 Proportion of floating rate loans

03 Average contractual tenure

04 Average age of borrower

Tables

1.0 Disbursements

01 Disbursement growth

02 Growth in housing

2.0 Outstandings

01 Outstanding portfolio

02 Past vs current values of LTV, IIR

3.0 Market trends

01 Net profitability margin of HFCs

02 Non-performing assets - Gross

03 Non-performing assets - Net

04 HFC funding mix

05 Banks funding mix

06 Housing finance - Disbursements

07 Player-wise organised home finance disbursements and market shares

Sections

1.0 Underlying asset dynamics

Population growth

Urbanisation

Nuclearisation

Affordability

2.0 Regulations

3.0 Profiles of major housing finance companies

Housing Development Finance Corporation Limited

LIC Housing Finance Limited

Dewan Housing Finance Corporation Limited

GIC Housing Finance Limited

Can Fin Homes Limited

Figures

3.0 Profiles of major housing finance companies

01 HDFC shareholding pattern as on March 31, 2007

02 LICHF shareholding pattern as on March 31, 2007

03 DHFL shareholding pattern as on March 31, 2007

04 GICHFL shareholding pattern as on March 31, 2007

05 CFHL shareholding pattern as on March 31, 2007

Tables

2.0 Regulations

01 Regulations applicable to banks and HFCs

3.0 Profiles of major housing finance companies

01 HDFC net profitability margin

02 HDFC disbursement and outstanding

03 LICHF net profitability margin

04 LICHF disbursement and outstanding

05 DHFL net profitability margin

06 DHFL disbursement and outstanding

07 GICHFL net profitability margin

08 GICHFL disbursement and outstanding

09 CFHL net profitability margin

10 CFHL disbursement and outstanding

Section

1.0 Industry statistics

Tables

1.0 Industry statistics

01 Institution-wise housing finance disbursements and outstanding loans

02 Regional and bank-group wise classification of outstanding housing

loans of scheduled commercial banks as on March 31

03 Region-wise classification of outstanding housing loans by Scheduled Commercial Banks as on March 31

04 Size-wise disbursement of housing loans by HFCs

05 Size-wise classification of outstanding housing loans of scheduled commercial banks as on March 31 (Rs million)

06 Term-wise housing loans outstanding by HFCs

07 Size-wise public deposits with all reporting HFCs

08 Interest rate-wise public deposits of all reporting HFCs

09 Maturity-wise public deposits with all reporting HFCs

10 Important financial indicators of HFCs

11 Refinance disbursements

Abstract

• The size of the Car and UV finance industry, drivers of the industry and its growth
potential in five years along with the current status of used car industry in India
• The size of the Commercial vehicle finance industry, drivers of the industry and its growth
potential in five years.
• The size of the two wheeler finance industry, drivers of the industry and its growth
potential in five years.
• The current size, drivers and growth potential of the Car rental industry and the car leasing industry

• Investment Managers
• Venture Capitalists
• Management Consultants
• Research Companies
• Private Equity Managers
• Market intermediates
• Banks
• Automobile Industry participants
• Analyst
• Other Industry Professionals

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