Retail Finance - Auto Annual Review November 2008 : Market Research Report

Retail Finance - Auto Annual Review November 2008

Published by: CRISIL Ltd.

Published: Nov. 30, 2008 - 76 Pages

Sections: Rising interest rates and delinquencies to adversely impact the vehicle finance industry
Executive summary: 1.0 Vehicle finance industry outlook; Long term growth story to continue; 2.0 Car and utility vehicles finance industry; Introduction; Disbursements in the new car and UV finance market expected to; decline by 3 per cent each in 200809; Used car market; 3.0 Commercial vehicle finance industry; Introduction; New CV finance market to decline by 2 per cent in 200809; Increase in delinquencies to largely influence the changing; disbursement pattern in 200809.; 4.0 Twowheeler finance industry; Disbursements to decline by around 12.5 per cent in 200809; Interest rate environment and its effect on finance variables; Underlying asset market to witness slower growth
Figures: 2.0 Car and utility vehicles finance industry; 01 Interest rate and yield; 02 With increasing competition, benefits passed back to customer increases; 03 Financier's commision to dealer; 04 Savings on EMI has increased with discounts and subventions EMI; per Rs 1 lac with actual tenures; 05 Profitability - New cars and UV finance; 06 Drivers for new car finance market; 07 Drivers for new UV finance market; 08 Car finance vs car market; 09 UV finance vs UV market; 3.0 Commercial vehicle finance industry; 01 Interest rate and yield; 02 Profitability analysis; 03 Composition of LFOs and SFOs LCVs; 04 Composition of LFOs and SFOs MHCV; 05 Drivers for the new CV finance market; 06 Loan to value for LCV and MHCV
Figures: 4.0 Twowheeler finance industry; 01 Drivers for twowheeler finance market; 02 Twowheeler finance vs twowheeler markets; Tables; 1.0 Vehicle finance industry outlook; 01 Growth in disbursements; 2.0 Car and utility vehicles finance industry; 01 Growth in disbursements; 3.0 Commercial vehicle finance industry; 01 Growth in disbursements; 4.0 Twowheeler finance industry; 01 Growth in disbursements
Sections: 1.0 Industry basics; Important terms pertaining to vehicle finance; Research methodology; 2.0 Regulations relating to NBFCs; Definition; I) Regulations relating to acceptance of public deposits; II) Requirements as to capital adequacy; III) Provisioning requirements; IV) Concentration of credit / investment; V) Structural linkages between banks and NBFCs; VI) Restrictions on banks relating to NBFCs; VII) Regulations relating to systemically important NBFCND; 3.0 Underlying asset - demand drivers; Cars and utility vehicles; Overall demand drivers for passenger cars industry; Commercial vehicles; Twowheelers; Segmentwise change in demand for twowheelers; 4.0 Evolution; Cars and UVs; Commercial vehicles; Two wheelers; Charts; 1.0 Industry basics; 01 Flow chart for EMI and yield calculations; 02 Flow chart for calculating outstanding; 03 Flowchart for calculating disbursements for commercial vehicles
Tables: 2.0 Regulations relating to NBFCs; 01 Old vs. new classification; 02 Revised ceiling on public deposits; 03 Risk weights for on balance sheet items; 04 Risk weights for off balance sheet items; 05 Provisioning norms for loans and advances; 06 Provisioning norms for lease rental instalment; 3.0 Underlying asset - demand drivers; 01 Past growth rates
Section: 1.0 Industry statistics
Tables: 1.0 Industry statistics; 01 Shriram Transport Finance Company Ltd (STFCL); 02 Bajaj Auto Finance Ltd; 03 Cholamandalam DBS Finance Ltd; 04 Sundaram Finance Ltd; 05 Mahindra & Mahindra Financial Services Ltd; 06 Magma Shrachi Finance Ltd; 07 Indiabulls Financial Services Ltd; 08 Tata Motors Finance Ltd

Abstract

Financiers in India are facing a new set of challenges following the turmoil witnessed in the international credit market. The tightening liquidity scenario in India over the last year has increased the borrowing cost of financiers. Financiers, in turn, are passing on the increased in the cost of funds to customers. This increase in rates has been more prominent in the vehicle finance industry where interest rates have risen by 250-300 basis points (bps). This has raised concerns of credit for retail financiers.Further, the moderation in bank credit growth rates in 2007-08 appears to have been largely confined to retail segments such as housing, consumer durables and vehicle loans; of which vehicle loans comprises one-third of the country’s total retail loans. It is, however, possible that there could be a further moderation in the growth over the next year, which might primarily affect the retail segment.

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Retail Finance - Auto Annual Review November 2008

Table of Contents

Abstract