Fada welcomes SBI moves on longer credit period, cheaper loans

MUMBAI: The Fada, the national body of auto dealers who are facing an existential crisis, Wednesday welcomed the largest lender State Bank's decision to extend credit period for them and provide loans on a fixed interest rate during the forthcoming festive season, saying the moves will help improve sentiment and boost demand.

Around 3.5 lakh jobs losses have already been lost across automobile dealerships in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump, which hit a 19-year low in July, plunging over 31 percent. The country's largest lender SBI on Monday announced a number
of offers including cheaper car loans to push credit demand ahead of festivals beginning later this month and lasting till the new year.


"The steps will encourage auto demand", said the Federation of Automobile Dealers Association (Fada) president Ashish Harsharaja Kale.

"This will definitely act as an enabler in reviving customer confidence and help many undecided ones to conclude on their purchase decision," he said.

Normally credit period is for 60 days but SBI has extended it to 75 days in some cases and 90 days in others.

Kale also expressed confidence that similar measures will be taken by other banks and non-banking finance companies to perk up demand.

As per the national OEM body Siam figures, wholesale across all categories declined 12.35 percent to 60,85,406 units in April-June. On the other hand, registrations dipped 6 percent to 51,16,718 units in the same period.

Passenger vehicles segment has been the worst hit with sales continuing to decline for almost a year now. In July, market leader Maruti Suzuki reported a 36.3 percent drop in its domestic wholesales, while Hyundai saw a dip of 10 percent.