Car loan india

Paris-based auto major Renault has chosen India to provide a larger role in designing its ultra low-cost car that it is developing with two-wheeler major Bajaj Auto, as a growing interest in economical cars in emerging markets drives the plans of most auto majors.

This is a marked departure from Renault's previous plans when such assignments were evenly spread across the company's other centres globally.

Till now, if Renault had to develop any new product all the design centres across the world would work at it and Paris would take a final call. Since it's the first time that Renault is developing an ultra low-cost car in India, it has decided that Mumbai's design centre will provide the main design framework, with other design centres across the world providing smaller inputs for the ULC. The Nissan design team is also understood to be providing inputs on designing the small car.

A team of 10-12 Indian designers are working on the small car with Pankaj Jhunja as head of the design centre and Ajay Jain as chief designer. While these designers were working from a makeshift facility till date, the new high-security design facility in Mumbai is scheduled to be inaugurated on September 24.

The ULC will not be positioned on price alone as Bajaj Auto has always maintained that it's not after the cheapest car price tag. While it will be competitively priced, its focus will be more on fuel economy and emission standards. The JV will try and maintain the pricing in the range of $2,500 to $3000. Check out the latest car loan rates here to avail your dream car now.

In June, Bajaj-Renault-Nissan announced a joint venture for the ULC project to be 50% owned by Bajaj Auto and 25% each by Renault and Nissan. Currently discussions are on for product portfolio, engine displacement, branding, distribution channels and export plans. The alliance will cover an entire portfolio of products from cars to multi-purpose vehicles.

The ULC will be made in Chakan in Maharashtra with an initial capacity of 4-lakh units per year and sales are expected to start early 2011 in India. While India sales will be the main focus area, the JV will also explore export opportunities in other emerging markets.

Renault already has a JV with utility and tractor major Mahindra & Mahindra to make the Logan, an entry-level mid-size sedan.

The future of Tata's Nano - the world's cheapest car - remained in doubt today as protestors continued to besiege the partially-built factory where the £1,250 automobile is supposed to begin production in as little as four weeks.

Work at the plant, in Singur in the state of West Bengal, ground to a halt on Friday, when Tata said it was too dangerous to send its workers to the site. More than a week ago, Ratan Tata, the chief executive, gave warning that he was ready to abandon Singur if the protests continued. Such a move would involve Tata writing off as much as $350 million in investment.

Several of India's most prominent businessmen have now given warning that the ongoing shutdown risks ruining India's credibility as an emerging industrial superpower.

The tens of thousands of demonstrators that have gathered at Singur claim that 400 acres - about half the factory site - was illegally taken from smallholders by the state's communist-led government and are demanding the land back.

On Thursday night more than 3,600 Tata workers were blocked from leaving the plant by angry mobs. After receiving threats of further violence, the company told its staff to stay at home. "Our workers are not attending today," a Tata spokesman told The Times this morning.

The decision to down tools is a severe blow for the Indian conglomerate, which had wanted the Nano to reach showrooms in time for a prominent Hindu festival in October - a deadline that now appears unlikely.

The ultra-cheap car was first unveiled in January when its super-thrifty engineering was hailed as a breakthrough that would transform the global auto industry. Since then the Singur crisis and the soaring cost of raw materials have threatened to scupper the Nano's viability.

The Nano's symbolic significance was underscored last Wednesday when rival industrialist Mukesh Ambani, the billionaire behind Reliance Industries, India's largest private-sector company, gave a rare show of support for Tata. "A fear-psychosis is being created to slow-down certain projects of national importance," Mr Ambani, who has also faced hurdles in doing business in West Bengal, said.

Sunil Bharti Mittal, chairman of Bharti Airtel, India's largest private-sector mobile group, said: "The Tatas pulling out of West Bengal would be unfortunate for India ... the much-needed fresh wave of industrialisation in the country could suffer."

Several companies, including the FTSE 100 miner Vedanta, have encountered problems in establishing large industrial projects in India, where property rights are often disputed.

West Bengal's leftist leaders fought hard to host the plant, both for the jobs it would bring and for the message the Nano project was supposed to send the world: that India was open for business and capable of matching the manufacturing might of China.

Now, as the land row grinds on, Tata insiders admit the factory has become a PR disaster. Company executives are angry that India's national government has not intervened. There is, they say, a good chance that Tata will cut and run and that several other Indian states are lobbying hard to attract the project.

Critics say Tata has allowed the issue to fester. West Bengal first lured the Nano in 2006. The move immediately raised the hackles of local smallholders whose land - much of it immensely fertile -- was expropriated for the project under rules drafted by the British more than a century ago. The farmers' cause was latched on to by local opposition politicians, the key organisers of the current unrest.

About 2,250 out of 13,000 affected farmers have refused to take the compensation offered by the state government for their land.

All this comes as Tata faces the worst outlook the auto industry has seen in years: demand for new cars has slumped; high commodity prices have piled pressure on margins and the cost of credit has soared this year. Two weeks ago, the group was forced to scrap a £365 million rights issue that was to help finance the group's £1.15 billion acquisition of Land Rover and Jaguar after a plunge in its share price rendered the plan untenable. It will now resort to an asset sale to raise the cash, which is required to refinance an expensive bridge loan.

Over the weekend, the prospect of a resolution in Singur appeared distant. The protestors seemed emboldened by the decision to close the plant and vowed to step up their blockade. Becharam Manna, an activist at the site, said: "We will not allow anyone to enter."

Tata Motors yesterday said it had sold 43,576 vehicles in August, a decline of 3 per cent on the same month a year earlier.

Two-wheeler manufacturers are ready for life after ICICI.

Most automobile companies have decided to enter the finance business by either expanding their non-banking finance arms or through tie-ups with local financers.

ICICI, the largest private sector bank in India, has decided not to provide two-wheeler loan facility through its dealer network as part of its efforts to cut down expenses. The bank, however, will provide two wheeler loans at its branches.

TVS Motor and Bajaj Auto, two of India's largest two-wheeler manufacturers, have almost finalised alternate arrangements to finance their businesses. "This would mean better service for customers," said S Sridhar, CEO, two-wheelers, Bajaj Auto. "However, we would ensure that the customers' credit history is properly scrutinised".

While both the companies have expanded their in-house finance arms, TVS is also looking at outsourcing finance to local financers to fill in the gaps at its showrooms across the country. The company has been in talks with up to six local financers in various regions besides its own finance arm, TVS Finance.

"The question is not of credit, it is of the need for two-wheelers in India, and we are working out a strategy to fill the need," said HS Goindi, head of sales, service and marketing, TVS Motor. "Since local financers have better local knowledge, they will be able to figure out a way to ensure credit quality."

Bajaj Auto Finance Ltd, the finance arm of the Bajaj Group, has decided to enter the two-wheeler finance market.

"Mercedes Benz, Audi are among some companies abroad who have been very successful in finance businesses. We feel this is an opportunity," said Sridhar.

BAFL was on the expansion mode since last six months, Sridhar said.

While the companies said that ICICI Bank's pullout would hurt two-wheeler makers, they also said that the quality of credit is not necessarily a killer. "There is a huge need for two-wheelers in the Indian market, and we have seen growth at TVS in the last two months," said Goindi.

India, like many other economies, has embarked on a long, difficult road to check runaway prices. It's now evident that policymakers will hike interest rates till it hurts and pulls down demand. The Reserve Bank of India (RBI) as well as the government are willing to sacrifice a bit of growth to douse inflation - an issue that has captured the collective imagination.

On Tuesday, RBI governor YV Reddy hiked the benchmark short-term rate by 50 basis points, about 25 bps more than what the market had expected. Bonds and equities reacted sharply, and the Sensex crashed 557 points.

Soon, home loan seekers and corporate borrowers will feel the pinch since borrowing money will now be far more costlier. RBI has not only raised the benchmark repo rate - the rate at which banks borrow from RBI - from 8.5% to 9% with immediate effect, but has also hiked the cash reserve ratio (CRR) for banks by 25 bps - a measure that will drain Rs 9,000 crore from the banking system.

Given the outright hawkish policy stance, it's clear that Mr Reddy will not hesitate to take more policy actions if he thinks that inflationary expectations have not been adequately checked. However, there is a growing perception that the Indian economy, in its current stage, may be better prepared than before to absorb rate shocks. Thus, the price it will have to pay would be smaller than feared. Addressing the media, Mr Reddy said RBI's "approach to address demand pressures would be calm and calculated to avoid exaggerated bearishness."

The money market is reflecting interest rates at levels last seen in 1999, a period characterised by a deep slowdown. Some of the more pessimistic analysts predict a bear market of indefinite length and a growth in the region of 7%, though the latter is still high by world standards. Now easily search your car loan in india here also get inside out details about all banks offering this retail loan.

RBI, however, still expects an 8% growth. The optimistic view is that if RBI is able to bring down inflation to 7% by the end of the fiscal, which is its target, rates may start coming down. However, some forecasts peg inflation as high as 15% by October, which would surely mean higher rates.

BANKS TO HIKE PLRs

Banks are readying plans to raise lending rates by at least 50 basis points over the next few days, keeping in mind the central bank's message to moderate loan growth. Bank of India chairman and the head of the Indian Bank Association - the lobbying arm of local banks - TS Narayansami said he expects banks to raise lending rates by 50 basis points.

"Most banks will look at revising rates only next month since the rate hike kicks in from August 30. Meanwhile, they will review the liquidity position," he said hours after the policy review. The prime lending rate (PLR) of most state-owned banks ranges between 12.75% and 13.25%. However, private banks charge much higher, including the largest private lender, ICICI Bank, with its PLR being over 15%.

For a long time, these banks had not hiked rates, but now with the rising cost of funds, especially deposits, they do not have the leeway to absorb these costs.

Italian design house Pininfarina, whose portfolio includes cars from Ferraris to the Tata Indica, has announced that it will put on sale an electric car for the Indian market by 2014.

The car will go on sale first in the European market in 2010. It will then be introduced to other countries, including India, after it achieves a sales target of 15,000 units by 2014 in Europe and the US. However, should the car achieve the target earlier, the launch may be earlier than the projected date. You may check all important information about car loan here like: interest rates, eligibility criteria, tenure, processing fee etc.

Design work is currently being carried out at Pininfarina's facility in Italy. The concept will be on the Pininfarina stand at the Paris Auto Show in September. Pininfarina claims a range of 250km on a single charge.

Get ready to shell out over Rs 5,000 more on a car loan of Rs 3 lakh for a period of three years as major banks are planning to hike interest rates on auto loans by 100 basis points, thanks to the increase in the repo rate and hike in CRR by the Reserve Bank of India (RBI) on Tuesday. In May also, leading banks had increased the interest rate on auto loans by 25-50 basis points. Consequently, after the two close hikes, interest rate on auto loan is expected to go up from 13.75% to 14.25% in April to 14.75 to 15.25%, with effect from July 1.

"There are several factors that are acting against the auto industry. The overall sentiment is low and people are staying away from leveraging on investments. As a result, there might be a slow down in demand in the short term," says Sumit Bali, CEO, Kotak Mahindra.

"Banks would be forced to increase interest rates by more than 50 basis points as the simultaneous increase in CRR will increase the overall cost of funds," says an official of a leading bank.

While a Rs 3 lakh Maruti Alto or Hyundai Santro, when financed, will cost you around Rs 5,400 more, a Rs 5 lakh Maruti Swift or Tata Indigo will come at an additional cost of around Rs 9,000 and a Rs 8 lakh Maruti SX4 or Honda City will cost you an additional Rs 14,000.

"The recent move by RBI will adversely impact the auto finance industry. The bank is evaluating the impact and will shortly decide on the quantum that has to be passed on to the customers," says Rajan Pental, auto finance head, HDFC Bank.

According to Bali, however, if the core economy continues to do well and the GDP grows at 7.5% to 8%, there would be more disposable income in the hands of the consumers and this would revive the sentiments of the buyers. Consequently, the auto industry is expected to grow at 8-10%. The Reserve Bank of India, on Tuesday, increased the repo rate or the key lending rate by half a percentage point to 8.5% and the cash reserve ratio by 25 basis points to 8.75% in two stages. The bank's move is prompted by the need to control inflation that touched a 13-year high of 11.05% for the week ended June11.

Led by cars, India's auto sales rose in May from the year-ago period, which was dogged by a religious custom that barred the purchase of big-ticket items.
Sale of cars, trucks and two-wheelers rose 8% in May this year to a total of 852,872 vehicles, according to data from the Society of Indian Automobile Manufacturers (Siam), an industry body.

The latter half of May last year coincided with an inauspicious period in the Hindu lunar calendar. People avoid buying cars and motorcycles during that period, which occurs once in four years. Car and utility vehicle sales were up almost 17% this May from the year-ago period as consumers, with a bit of extra savings from lower income tax rates this year, bought new models. Sales of two-wheelers, which had fallen all of last fiscal year, gained 7% during the month.

The growth in auto sales during May was, however, slower than the 10% year-on-year rise in sales in April, indicating that rising inflation, record high interest rates and a credit crunch in auto financing have continued to crimp sales in Asia's third largest vehicle market.

With loan defaults expected to gallop as the economy is starting to cool and inflation rising, and lenders barred from using arm-twisting clients to pay up bad loans, banks are becoming more and more reluctant to provide vehicle financing. Worse, India's oil ministry last week increased the retail price of petrol and diesel by about 10% to counter the impact of spiralling crude oil prices on domestic oil marketing companies.

The impact of this is likely to be seen in the coming months as consumers may either shift to smaller, more fuel-efficient cars or stay out of the market altogether and use more public transport.
"First-hand car buyers could postpone their purchases because of a hike in fuel prices," said Vaishali Jajoo, automotive analyst at Angel Broking Ltd. "This would affect the sales volume of entry-level cars." But, in May, auto makers haven't done too badly. Hyundai Motor India Ltd grew the most, its sales rising by 47% to 24,510 cars compared with a year ago, thanks to continuous demand for its i10 small car, which averages 10,000 units a month.

Dark clouds. A spate of black thunder with grease lightening. Power cut. The first drops of rain. The smell of wet earth. The red gulmohar in all its glory. I must be back to where I belong. Or, am I?

The ring of an SMS breaks my daydreaming, throwing me back into reality. I am in my office chair and my snooze seems to have created some excitement among my colleagues.

I check the SMS. It tells me a certain amount of money has come into my bank account. Looks like my annual bonus and arrears have been credited.

Have money, will spend. Once out of office, I head straight for this auto showroom. I'm going to ride back home on this motorbike I have had my eyes on for sometime.

"Sir, why don't you get this bike financed? The auto finance company is charging an interest rate of only 9%?" the sales agent suggests as soon as I finalise the purchase.

That sets me wondering. When banks are giving out home loans at 10-14%, how can an auto loan go for as low as 9%? Auto loans are clearly more risky than home loans. A house at the end of the day is immovable property, whereas anyone can disappear with a car or a motorbike after buying it. So, shouldn't auto loans be more expensive?

"Can you explain to me how the rate is just 9%?" I ask the agent.

"It is simple sir. See, your bike costs Rs 75,000, and I am ready to give you 80% finance, i.e. Rs 60,000. The rest you have to pay on your own. Further, if you take a three-year loan, the equated monthly installment (EMI) comes to Rs 2,117. So over a period of three years, or 36 months, you would have paid around Rs 76,200 (Rs 2,117 x 36) in total. The principal part of your loan is Rs 60,000. That would mean an interest amount of Rs 16,200 (Rs 76,200 - Rs 60,000) that you pay over three years, or Rs 5,400 every year. Now, Rs 5,400 every year on a loan of Rs 60,000 would mean an interest of around 9% every year," the agent explains.

This is too good to be true, I think, surely there's a catch somewhere. And then it strikes me. There is something the agent isn't telling me. Every time I pay an EMI, I would be repaying a certain portion of the original loan of Rs 60,000. Yet, rather than charge me interest on the loan outstanding at that point, the company would be charging 9% in perpetuity over the loan term.

I take out my laptop. A quick use of the RATE function in MSEXCEL tells me the actual rate of interest being charged is nearly double that claimed by the agent, at 17.5%.

"Thank you, but no thank you," I tell the agent, "I'll pay cash."

I bargain hard and get a discount of Rs 2,500, getting the price down to Rs 72,500. I take out two debit cards and ask the agent to split the amount between the two.

"Sir, why do you want to pay the entire thing at one go?" the agent persists. "Pay through a credit card and you can pay in three EMIs at 0% interest and earn some interest on the remaining money," he proffered.

"Zero percent interest, how?"

"See the price of the bike is Rs 75,000 and all you need to do is pay Rs 25,000 in 3 EMIs. This works out to Rs 75,000, which is just the price we are charging," he explains.

Banks are beginning to raise interest rates in select segments - a sure sign that other loans could also turn expensive in the days ahead.

ICICI Bank has raised its interest rate on auto loans by 75 basis points, while some public sector banks are planning to raise interest rates on sub-PLR (prime lending rate) loans.

Sources from India's second largest bank said interest rates had been raised between 50 and 75 basis points for certain segments of auto loans.

These are effective from the first week of April.

Auto loans prior to the hike were in the range of 13.5-14 per cent.

Although ICICI Bank has refrained from touching any of its other rates after the RBI announcement, officials from the bank have indicated that it would be done only if the cost of funds go up.

A couple of nationalised banks that include Union Bank of India and Indian Overseas Bank are learnt to be close to raising their sub-PLR loans by 25-50 basis points.

Currently, these loans are available at around three percentage points below a bank's prime lending rate, and a hike will reduce the margin.

In a bid to increase their auto loans portfolio, public sector banks are offering lower interest rates and organising special campaigns. This could help revive the demand for auto loans, which has been slowing down, said bank officials.

While the State Bank of India is organising a special car rally for its customers, the Bank of India and the Union Bank of India have reduced the rates on car loans.

Car and commercial vehicle asset segments comprise one-third of total retail loans for the entire banking industry, said a recent report from rating agency Crisil.

Most public sector officials admit that car loans form a minor part of their retail loan portfolio, as private banks and NBFCs hold a major chunk of the market share. The average rate of interest charged by public sector banks for auto loans is 11-12 per cent, depending on the amount and duration of loan.

SBI's Mumbai zone is organising a special campaign to promote auto loans from March 1 to April 16. The highlight of the campaign is a car rally to be held tentatively on April 20, between Mumbai and Lonavala.

The first prize is an all expense paid week-long trip to Sydney.

All those customers who avail car loans from SBI's branches in Mumbai and Thane, between March and April 20, would be eligible to participate in the rally, said an official from the bank.

Car manufacturers are literally shifting gears when it comes to marketing. From the mass-targeted campaigns and offers till now, leading manufacturers are now coming up with segment specific schemes. For instance, while car market leader Maruti Suzuki India Ltd (MSIL) and General Motor India are eyeing the largely untapped rural and semi-urban areas through special financing schemes, Hyundai Motor India Ltd (HMIL) has set its eyes on the fast growing working women segment.

"Financing is a big problem in rural areas which are growing Markets and have lot of potential. Hence, we have tied up with Reliance, Tata Capital, ICICI and GMAC for special financing schemes wherein about 90% of the total amount will be financed to people in rural and semi-urban areas," said Ankush Arora, vice-president, General Motors. Nowadays car loan in india are becoming popular as the demands increasing day by day so to overcome this loans are available at one shop to offer some extremely good tips on interest rates.

Even MSIL has tied up with Chennai-based Shriram City Union Finance Ltd to offer easy finance in the southern states and subsequently across the country. According to a Mumbai-based analyst, the move is an immediate reaction to the waiver of farm loans announced by the finance minister in Budget 2008-09, as this is likely to enhance the purchasing power of people in semi-urban and rural areas.

Farmers loan waiver scheme may have been the most talked about measure in the Budget, but for the middle class, the Budget was all about small, but smart cars.

Not surprisingly, finance minister P Chidambaram, who looks and sounds as suave as his target audience in urban India, cut the excise duty on small car by a fourth to 12%.

He followed it up by announcing a similar duty cut for two- and three-wheelers and buses. Manufacturers responded to the cut almost immediately. While Hyundai announced a pro-rata price cut by the evening of the Budget day itself, Tata Motors promised to follow suit in a few days.

"We will reduce prices of small cars and commercial vehicles (including buses, bus chassis and bus body), in view of the reduction of excise duties announced in the Union Budget. The new applicable prices will be announced in the next few days, after the company has studied the details of the policy changes," said the company in a press statement.

Loan recovery agents are yet to heed to Reserve Bank of India's (RBIs) loan recovery guidelines and their misadventures are continuing unabated. In another case of excesses by loan recovery agents, coercive methods such as dragging, assault and threatening were used to affect loan recovery from one Pradyumna Das, who took a vehicle loan from ICICI Bank.

According to the victim, who was not able to deposit the last two installments of the loan, he was threatened at knife and gun point, assaulted and dragged forcibly out of his car by six recovery men of the bank, who later fled with his car. The incident happened along Janpath near the Satya Nagar area. Pradyumna was regular on his loan repayments for the last three years and it was only on the last two occasions that he had defaulted.

The RBI's diktat of banning the recovery agents for a particular area if they don't mend their has had little effect on the banks and their errant officials. Looks like it is just like another incident where government agencies announce harsh measure to control immediate public outcry and little follow-up is done on the matter afterwards. When the loan recovery incidents were gaining repeated attention in the media and legal circles, every body was harping on ways and means to rope-in the musclemen and goons employed as recovery agents. But it seems that the entire operation has run out of steam and slowly but surely the recovery agents are again taking laws in their hands.

source: Rupeetimes

Car loans and financing for consumer durables such as cars, televisions and refrigerators could come on easier terms.

The Union Finance Minister, P. Chidambaram, on Tuesday advised the chief executives of public sector banks (PSBs) to focus attention on delivering adequate credit for home loans and consumer durable sectors, stating that these two sectors were drivers of economic growth.

"There is some slowing down for home loans and consumer durables. I have asked them to look at these sectors to ensure that adequate credit is delivered there too. Productive sectors have not been starved of credit," Chidambaram told presspersons after his meeting with chief executives here on Tuesday.

Official data show that personal loan advances of public sector banks decelerated to 20 per cent growth during April-November 2007 against 35 per cent growth in the corresponding period of the previous financial year.

In the personal loans category, growth in credit for housing and consumer durables decelerated considerably. The year-on-year increase in home loans as on November 23, 2007 stood at about Rs 32,424 crore, lower than the similar year-on-year variation of Rs 53,198 crore as on November 23, 2006.

"It's a fraud on existing retail borrowers when banks lower the rates only for new customers," admits the retail head of a private sector bank, albeit only in private, as banks continue to lower the interest rates for new borrowers.

Banks had raised the interest rates on loans by as much as 350 basis points although the cost of deposits had increased by a maximum of 200 basis points. With the deposit rates having softened from the April 2007 levels, banks have decided to pass on the benefits but only to the new borrowers.

While the country's two largest banks, State Bank of India (SBI) and ICICI Bank, have refrained from lowering their benchmark prime lending rates (PLRs) in 2007-08, they have been giving home loans, car loans and other retail loans to new borrowers at lower interest rates for almost a third of the year.

Even as there has been no easing of interest burden for existing borrowers, who have seen interest rates climb up by up to 350 basis points since May 2006, banks have been offering new home loans at 50-100 basis points reduced rates since October 2007 as part of festival period offers.

With the looming US economic slowdown forcing an interest rate cut of 0.75 per cent on Tuesday, there is growing speculation that the Reserve Bank of India (RBI) will do the same shortly.

If that happens, one could see a slash in retail loan rates, including home loans, by 0.25-0.5 per cent, over the next two quarters. Floating rate home loans are between 10.25 per cent and 10.5 per cent for HDFC, SBI and ICICI Bank, the three major lenders.

The RBI is scheduled to announce its quarterly monetary policy next Tuesday. It will be under pressure as the Federal Reserve (the Fed) rate cut has widened the differential between US and Indian rates to 4.25 per cent. (The Indian repo rate, the rate at which the RBI lends to banks, is 7.75 per cent, while the US Fed's overnight rate is 3.5 per cent).

Rajiv Sabharwal, head of retail assets and rural finance at ICICI Bank, felt that there would not be any change in interest rates on retail loans as a whole during the current quarter, but a lot would depend on what the central bank would do.

"While we do not see a change in interest rates on loans for this quarter, it all depends on the regulator and the cost of funds," Sabharwal added.

Talking about auto loan rates specifically, CBoP's Singh feels they would slide by a good 50-100 basis points this year.

"While demand for car loans has been satisfactory, demand for two-wheeler loans is almost nil owing to high interest rates. If there is a decline in interest rates, we could expect some softening in auto loan rates this year. This will help a pick up in demand," said Singh.

Car loans interest rates are influenced greatly by the credit history of the customer. If your personal credit history is good, as you have been making payments on time, you will be able to secure a compatible price, as then the financier considers you less risky. If you have not been making payments on time and have a bad credit history, you may find that you can only secure car loans at interest rates higher than the prime monthly charge.

Find Out the Current Auto Loan Interest Rates

Most people consider the amount of down payment they will have to make; they will consider the principal they will have to borrow but many fail to actually also consider the car loans interest rates. The fees are awfully important; as if you negotiate, you may be able to save a few hundred to a few thousand dollars!

People can easily find various online lenders offering no credit auto loan that can be made use of by those with extremely poor credit profiles. It may be true that the interest rates are higher than available for those with good credit, but the fact is that you are able to purchase a car despite your credit profile.

In fact, people can also easily secure bankruptcy car loan, enabling them to buy a car which they can use to rectify their credit profile. When payments are being made on time, their credit record will soon get better. They can then opt for a car refinancing loan and secure more affordable, charges.

Monthly charges can be lowered by several ways. You may make a considerable down payment, which means you borrow a lower amount, get lower monthly installments and repay the loan faster. You may also take care to maintain a good credit rating by making payments on time, having a low debt to income ratio, and by ensuring that your credit record has no mistakes. You may keep track of your credit profile online or may secure them from the credit bureaus.

The best way to ensure that you get the lowest interest costs, no matter what kind of a budget you are on and whatever your credit history, is to get quotes from various firms online. When you compare the quotes, you will get a clear idea of the monthly amount and options available to you. This will get you to select a lender offering monthly installments that you are comfortable with. Do research all you can about the current car loans interest rates before you decide to purchase a car.

India's giant Tata Group was due Thursday to unveil the world's cheapest car that auto analysts say could turn upside down the cost of vehicles globally.

The long-awaited "People's Car", over which the company has thrown a shroud of secrecy, was slated to be unveiled at the start of India's biggest auto show here by Ratan Tata, the 70-year-old tycoon who heads the tea-to-steel group.

Tata, whom the Indian media have likened to US automobile pioneer Henry Ford, has said he hopes the ultra-cheap car will "make a contribution to making life safer" for Indian families who often travel four to a motorbike -- father driving, mother riding pillion and two children wedged in between.

The car, expected to carry a sticker price as low as 2,500 dollars could "revolutionise car costs downward," said leading Indian car analyst Murad Ali Baig. It "is bound to be followed by other low-cost ones."

The four-door five-seater rear-engined auto, described by those who have seen it as boasting "cute" looks, is targeted at drivers trading up to four wheels from two in India as a booming economy creates new affluence.

Links-via-afp.google.com

Carmakers across the globe have their sights set on developing low-price vehicles for the fast-growing market in India, in a battle seen as key to gaining strongholds in the markets of developing countries.

Funds are being plowed into the development of an "ultralow-price car" that would sell in India for about 300,000 yen, in a collaboration between Tata Motors--an automobile maker in the Tata Group, a major Indian financial conglomerate--Nissan Motor Co. and French carmaker Renault.

Toyota Motor Corp. and Honda Motor Co. also have plans to invest in the development of low-price models costing less than 1 million yen.

These manufacturers are particularly keen for their Indian strategy to bear fruit, as success there may be directly linked to victory in the markets of developing countries such as those in Africa--thought to be the future battleground for automakers. Owing a luxurious car in India is not so hard nowdays because many banks offering car loans to own a car without investing your lacs of money at one time. But the issues is choosing the right shop for your loan and for that just compare car loan rates to compete the various banks and avail the best deal.

Car manufacturers from across the world will be viewing with interest India's Delhi Motor Show, which opens on Jan. 9.

Tata Motors announced Dec. 19 it would use the Delhi Motor Show to unveil its ultralow-price car that will hit the markets with a price tag of 100,000 rupees (about 290,000 yen).

Ratan Tata, chairman of Tata Group and Tata Motors declared two years ago the motor company would invest in a 100,000-rupee vehicle, but a lid had been kept on details before the announcement.

The carmaker has given notice that the small car, believed to be a four- or five- seater, will go on sale in India in the second half of this year.

Cars manufactured in India from Indian components are set to be dearer in January. %u0160koda India, makers of the Octavia, Superb and Laura cars, has decided to raise prices of its cars because of rising input costs. A hike of up to Rs 20,000 is expected on various models. The new pricing for Skoda cars would be applicable from January 1st 2008. All three badges and the models are assembled in India with various levels of local parts in them.

A senior official from %u0160koda India said, "Input costs are negotiated on an annual target achievement basis with our vendors and the increase in prices is in line with our renegotiated terms with them. The company has made efforts to keep the price rise marginal on all models after analysing additional costs."

Maruti and Honda Motor India Limited (HMIL) are planning to raise prices of locally assembled cars by the end of the first month of 2008 to offset rising raw material prices.

source: Hindustantimes

Maruti Suzuki India Ltd. may raise car prices by as much as 12,000 rupees ($304) starting next month, the Press Trust of India reported, citing sources it didn't identify.

The increase in each model, prompted by a surge in raw material costs, will be decided on Jan. 2, the report said. More about new car loan rates and getting easy repayment solutions compare car loan rates.

Maruti, maker of half the cars sold in the country, is 54 percent owned by Suzuki Motor Corp., Japan's second-largest minicar-maker.

A cheap car in India would be a godsend for millions, but campaigners are flashing the hazard-warning lights

Building a "People's Car" for India's mass market is a global carmaker's dream. But it is one that is giving nightmares to the nation's green campaigners and road safety advocates. They fear that ultra-cheap cars will dangerously increase toxic emissions, urban congestion, unsustainable fuel use and road deaths in the country. But rather to hurry for your dream car just compare car loan rates to make your deal a healthy one.

India's Tata Motor plans to launch the world's cheapest car early next year. The as yet unnamed vehicle will cost just 100,000 rupees (£1,200) - almost half the price of the Maruti 800, the cheapest model currently available, from Suzuki venture Maruti Udyog.

Prospective car buyers take a quick decision on the models that you plan to buy. The prices of cars are expected to go up in the New Year.

To make buying more attractive, car companies are offering discounts in December.

Automakers usually face a slump in sales during December as customers prefer to buy vehicles in January and improve re-sale value at a later date.

The car industry has begun its exercise on price revision of its various models. The quantum of increase and its timing is being worked out by the top honchos of the car companies. Owing to buy a new car in 2008, be sure to compare car loan rates to make a perfect deal.

The car industry leader Maruti Suzuki India Ltd officials said that an increase in the prices of its various car models is inevitable due to rise in input costs such as lead and aluminium .

Hyundai Motor India (HMIL), the country's second largest car manufacturer, registered a robust 15.42 per cent growth in sales during November. The company sold 19,052 units as compared with 16,506 units in the corresponding month last year.

Hyundai attributes the increase to the contribution from i10, the newly launched small car which has sold about 10,000 units since its launch on October 31. The car has been pitched between two of the company's highest selling models, Santro and Getz.

Arvind Saxena, vice-president, marketing and sales, HMIL, said, "After the successful launch of the i10, Hyundai has been able to sell over 10,000 units of the car. As compared with last year, the sales have significantly increased for this month and we are positive that we will be able to keep the momentum going in the coming months." Looking for a finance that can own a dream car for you, so be sure to compare car loan rates in india to make your deal a beneficial one.

Mahindra and Mahindra recorded a growth of 35 per cent for the same month selling 17,846 units as against 13,154 units sold in November 2006.

Tata Motors, the country's largest automobile house, recorded a decline of 16 per cent in sales at 16,322 units. Indica and Indigo, the company's flagship models, recorded falls of 19.6 per cent and 29.5 per cent respectively.

The forthcoming Auto Expo in New Delhi will see some high decibel display not just at the Tata Motors pavilion, with its Rs 1 lakh car, but also from market leader Maruti Udyog as well. Maruti said a brand new concept car, A-Star, a new compact car, will be displayed at the ninth edition of Auto Expo in January 2008.

The showcasing at the Auto Expo, A-Star will join the elite club of concept cars displayed for the first time in India. Tata Motor's Indica was first displayed at the Auto Expo in January 1998 and hit the market a year later, witnessing a recording booking of over 100,000 units in the first couple of weeks of its launch. Make your dreams live of riding a car on Indian roads. just compare car loan rates and find your best deal to make a loan in India.

"With a 5-year capital investment of $ 2.2 billion in a new car plant, a diesel engine manufacturing unit, a new engine series and new models, Maruti Suzuki is emerging as a global manufacturing hub for Suzuki operations worldwide. The next level of commitment will be evident in R & D, with a vision to make Maruti Suzuki the R & D hub for automobiles in Asia. Concept A-Star is a decisive step forward in that direction," a statement from Maruti Udyog said.

Tata Motors is gearing up to roll out India's first hydrogen-fuelled vehicle in a partnership with the Indian Space Research Organisation (ISRO).

This will be a mini-bus scheduled to debut in 2009. ISRO will provide its recently tested cryogenic engine technology. A car is tipped to be next in line. Indian car loan market would definitely effected by this car.

"We have been successful in adapting the system for a bus or car engine and are fine-tuning it. The vehicle will be ready in two years. It will emit only water vapour and will not pollute the environment," ISRO chairman G Madhavan Nair told DNA.

Tata Motors confirmed to DNA that its advance engineering team is working on the project with ISRO but declined to give details "because of confidentiality."

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For the last few years, the number of car buyers had been increasing, and along with that, the interest rate too kept rising. The rise in interest rate has now come to a stage, where it has started impacting sales of new cars. Many potential car buyers are now either deferring their car purchase or funding their purchase from their own pocket.

It is reported that in 2006-07, more than one million new passenger cars were sold in India, 80% of which was financed by banks and other financial institutions. Now, it has come down to about 70%.. Between December 2006 and now, auto finance rates have gone up to 13.5% from around 9.5 to 10%. The average loan amount for a car is around Rs4 lakh. With the increase in interest by at least three percentage points, the monthly instalment for a car - financed for three year tenure - has gone up by approximately Rs600.for further enquaries check out compare Car loan.

Fewer Indian consumers are opting for loans to buy their cars because of higher interest rates and offers of greater cash discounts by car makers, a study by J.D. Power Asia Pacific showed.

Sixty percent of the more than 5,000 customers that J.D. Power surveyed in its annual sales satisfaction study said they had received a cash discount in 2007, up from 55 percent in 2006.

Simultaneously, the percentage of customers who took a loan to finance their new vehicles fell to 80 percent in 2007 from nearly 90 percent in 2006, the study noted.

"Increasing interest rates in the Indian market and differing manufacturer retail policies may partially explain this decrease in new-vehicle buyers seeking loans," said Mohit Arora, a senior director at J.D. Power Asia Pacific.

India's central bank has raised interest rates five times since June last year, making loans for automobiles more costly and hitting sales, particularly of motorbikes and small cars.

Interest rates on Compare car loan have climbed an estimated 300-350 basis points over a year, prompting several firms including Tata Motors and motorbike makers Hero Honda Motors and Bajaj Auto to cut production.

Top car maker Maruti Udyog Ltd has extended a discount offer of up $1,090 on several models including the best-selling Alto, and has thrown in an extra bonus for exchanging old cars in the month of August.

General Motors has an extended warranty, while other vehicle makers are also throwing in free accessories.

A Dubai-based engine manufacturer has announced plans to become the UAE's first mass producer of automobiles, which will export cheap 'smart cars' primarily to the Indian subcontinent and Africa.

By the end of next year, the company Praktiko said it would have established a production facility in Dubai Investment Park, with output expected to potentially reach millions of low budget cars named Tiger Kubs. Compare car loan rates in India and grab your best one and at very cheap EMI's and find more on how to repay your loan easily.

Speaking at the Dubai Motor Show, Massoud Khodjasteh, managing director of Pratiko GT, explained how his low budget cars will create hundreds of new jobs and open up a completely new sector in the UAE.

"We have officially entered the highly competitive 'One Lakh Race' to supply cars to these countries (the subcontinent and Africa), where demand is incredibly high for small, quick, economical and affordable cars.

Honda, Toyota, Volkswagen stitch plans for country-specific mall car models.

With India increasingly becoming the production and sales hub for all major car manufacturers, international giants like Honda, Toyota and Volkswagen (VW) are pulling out their drawing boards for an all-new India-specific car model.

Cutting costs
The primary reason that manufacturers have opted for a new car model for India is to make use of low cost manufacturing expertise and also to qualify for small car norms.

One of the first to announce plans was Honda Siel Car India (HSCI), also the leading Japanese player in India. The company is working on a model which would derive the benefits of a small car. "Definitely, our aim with the small car is to qualify for the excise duty benefits," said

Masahiro Takedagawa, president and CEO, HSCI.

Homemade
Jnaneswar Sen, senior marketing manager, HSCI, said, "The company has the option of launching the next generation Jazz with a 1.2 litre engine or we can go in for a completely new model."

The idea of benefiting from the small car norms has attracted Toyota and Volkswagen, too. Toyota, which had restricted itself to the mid-sized sedan market, has decided to foray into small cars 2009. Sources say that the company is developing a completely new car code named 800L at an undisclosed facility outside India and Japan. The company proposes to launch a car having 1000cc petrol-powered engine for Rs 3 lakh.

The development of a completely new car model usually entails a cost in excess of Rs 1,000 crore if the design, styling and engineering involved are not sourced from another model.

"They ripped my shirt, shaved my moustache, cut my hair and gave electric shocks on my chest and even spat on my face." CLN Murthy, a scientist with the Hyderabad-based Indian Institute of Chemical Technology, described how debt recovery agents tortured him after he defaulted on a US$25,000 loan from ICICI, India's second-largest bank, with $79 billion in assets.

Such experiences are unfolding in India's tragic version of a looming subprime crisis. Multinational banks and their outsourcedloan recovery agents are presently running for cover, following public outrage and dire warnings from law-enforcement agencies, consumer courts and the Reserve Bank of India.

In October, the country's apex Supreme Court scolded banks and financial agencies for hiring goons to recover loans, and declared that banks would be held responsible for the actions of their recovery agents.

There is a new Maruti around the corner. Maruti Suzuki India Limited (MSIL), the wholly-owned Indian subsidiary of Japan's Suzuki Motor, is launching Splash, a compact car, in India soon.

The car is the next generation Wagon-R, the popular tallboy compact. The company has already launched the Splash in the US market, and is expected to launch in India in the coming six to eight months.

Speaking to Hindustan Times on the sidelines of the Tokyo Motor Show, a senior Suzuki official said, "The Splash is our answer to the 'world car' concept. That is the car we would be looking at bringing to India." The Splash, a four door compact hatchback, was displayed at the motor show.

Hyundai Motor Co. introduced a new compact car in India on Wednesday, aiming to boost sales in one of the fastest growing automobile markets.

The South Korean automaker, which also uses India as an export hub for its small cars, said it invested about US$200 million (%u20AC140 million) to develop the new model - named i10 - that will be sold both in India and overseas.

Heung-Soo Lheem, the head of Hyundai's India operations, said the company hopes i10 will help boost Hyundai's market share in India to more than 20 percent next year from about 18 percent in 2006.

Hyundai's car sales in India have been nearly flat over the past six months as rising interest rates have discouraged many Indians from buying cars. Some of Hyundai's rivals here have managed to overcome the slump, however, by introducing new models.

The government's liquidity tightening measures this year have pushed up interest rates and slowed down offtake of auto loans. While interest rates have not fallen significantly yet, most experts say they will in future. Typically, the price of an auto loan is set for the entire loan tenure. But now some banks, such as State Bank of India and ICICI Bank, have started offering floating rate loans too. When interest rates are going down, floaters allow you to reduce your liability. Should you then
go for them?

The floater rationale
ICICI Bank's auto loans head, N.R. Narayanan, says: "Many customers told us that they were not going in for car loans now since they were expecting the interest rates to get better (fall). We thought we should offer them the floating rate scheme so that they also get the benefit if at all the rates fall." He says ICICI Bank's rates are linked to floating reference rate (FRR), the benchmark used for its home loan floating rates.

State Bank of India, India`s largest lender, slashed interest rates on fresh auto loans by 100 basis points with 3-7 years tenure, reports DNA.

The bank has revised auto loan rates under a special festival scheme, effective from October 8 to December 31.
The bank also cut the floating rates on the existing auto loans with up to three years tenure by 75 basis points.

Shares of the bank gained Rs 100.2, or 5.85%, to settle at Rs 1,812.9. The total volume of shares traded was 501,486 at the BSE. Now compare car loan rates before owning a low EMI car for your family.

Call it the festive bonanza or an effort to boost sales after over eight months of slump in the Indian automobile industry. Major car manufacturers have come up with attractive offers - either in the form of discounts or gift vouchers - to woo customers who have been postponing their purchase due to high interest rates.

While GM (India) is offering discount of up to Rs 53,000 on Chevrolet Spark in the name of centennial celebration of its parent company, Maruti Suzuki is giving gift vouchers ranging between Rs 8,000 and Rs 30,000. Even Hyundai Motors is giving discounts starting from Rs 10,000 and going up to Rs 40,000. Honda is offering a trip to Tokyo to its first 10 buyers as its 10th anniversary celebration and Ford has unveiled the Fida edition of Ford Fiesta.

Another public sector lender, Bank of India, reduced its short-term interest rates by 0.25 per cent on car loans after SBI and Bank of Baroda announced it's cut for auto loan.

The bank's interest rate on this category will now stand at 11.75 per cent, a BoI release said here.

It is offering a special interest concession of 0.25 per cent on the rate of interest on vehicle loans for women.

After struggling for years to gain a foothold in India, General Motors Corp. is tasting some success lately. In the past six months, the U.S. automaker sold nearly 2 1/2 times the number of cars it sold in India in the same period last year, even as overall demand for new cars was hit by a sharp rise in interest rates.

The numbers underscore GM's growing success in one of the world's fastest growing car markets, even though its sales in India - totaling about 21,000 vehicles in the April-September period - fall far short of the 293,000 units that market leader Maruti Suzuki sold during the same span.

GM's market share in India has grown to 3.6 percent, topping American rival Ford Motor Co. for the first time.

The gains came on the back of two new models the company introduced earlier this year - the low-cost Chevrolet Spark, which is proving popular among women, and the Chevrolet Aveo U-VA, a premium hatchback.

Indian vehicle sales skidded in September by nearly 10 percent, hit by a credit squeeze, while car exports fell by over eight percent due to a rising rupee, according to industry data Wednesday.

Total domestic vehicle sales dropped by 9.58 per cent year-on-year to 889,693 units, the Society of Indian Automobile Manufacturers (SIAM) said.

Higher loan costs stemming from a slew of interest hikes that have pushed rates to five-year highs have deterred buyers and forced manufacturers to offer discounts to lure customers into showrooms.

Some 95 percent of commercial vehicles, 75 per cent of passenger cars and over 60 percent of two wheelers sold are financed through credit. Know more about car loan india.

Car makers are offering huge discounts and incentives, while banks are offering lower interest rate packages to lure customers back to the showrooms for the next two months, the peak of the festive season.

Leading the pack is Maruti-Suzuki, which plans to offer a discount of as much as 12% on its prices. Maruti-Suzuki's chief general manager, marketing, Mayank Parekh told ET, "Specific models like Zen Estilo and WagonR will carry high rebate offers while our best-selling model Alto will also have attractive price discounting schemes. We are also working with our banks and dealers to offer single-digit interest rates during the Diwali season."

Led by several marketing schemes like Wheels of India for state government employees, First Class Offer for railway employees, Power Deal for NTPC staff, Steel Wheel for SAIL, Hum Sath-Sath Hai for panchayats and rural consumers and Talker, an employee referral scheme, Maruti sales increased by 19% to 2,73,672 units till August this year.

India's two-wheeler market is highly affected from the increased defaults due to which market is witnessing a variation of the US subprime mortgage market meltdown.

Defaults on two-wheeler loans are estimated by some financiers to have touched nearly 40% of the total outstanding loans. That is pushing banks and financial institutions to tighten sharply the credit flow to the segment. In short, getting a loan to buy a bike has become a distant dream for many.

"We have adopted a stringent process to screen customer profiles, as defaults is close to 40%," said Sanjay Sisodia, promoter of a auto financing company. While defaults is seen across all bike categories, the bulk of the defaulters are in the entry level - 100cc and 110cc - segments.

Says Ashok Khanna, head (auto loans) at HDFC, "The rise in defaulters is largely because of sub-dealers issuing bikes on a temporary registration and not following up on a permanent registration."

Bajaj Auto Ltd. and TVS Motor Co., India's second- and third largest motorcycle makers, are counting on new models during the peak sales season to counter the worst slump in at least five years.

Bajaj Auto will produce more of its XCD DTS-Si motorcycle that it started selling last month and TVS will unveil a new 110-cc StaR City, the two companies said in separate statements. Hero Honda Motors Ltd., the country's biggest, has built up stocks before the festive months of October and November, Ravi Sud, chief financial officer said in a phone interview.

Companies in the world's second-largest motorcycle market aim to revive sales during the festive season after five-year high interest rates curbed demand in the past six months. Higher auto loan rates slow orders in a country where three-fifths of all motorcycles and scooters are bought on credit.

Extreme increase in Interest rates have slowed down the India's auto industry while an appreciating rupee is hurting exports,predicted by managing director of Tata Motors Ltd on Thursday.

"It is certainly a very challenging position at the moment," Ravi Kant told reporters on the sidelines of a conference.

India's central bank raised lending rates five times between mid-2006 and March this year to douse inflation pressures in the fast-growing economy.

The clear preference of customers for diesel cars is forcing car companies to increase their diesel engine capacities to tap the full market potential. While Maruti-Suzuki India (MSI) is increasing its annual diesel engine capacity to three lakh units from the current one lakh, General Motors is finalising plans to establish a new engine facility at Talegaon in Maharashtra. Others, too, are following the suit.

MSI, with the success of its lone diesel model, Swift hatchback, is investing Rs 2,500 crore in its diesel engine facility to crank out three lakh engines by 2009, a year earlier than planned. There is massive demand for it's 1.3 litre multijet diesel-powered Swift and the company is finding hard to cope with the demand.

"We will have three lakh 1.3 litre multijet diesel engines once the expansion is over in next two years. Some of these will be exported to other manufacturing facilities of Suzuki Motor Corporation while the majority will cater to the domestic market." a senior MSI executive said.

Hyundai Motor India Ltd, the second largest passenger car maker in the country, says sales growth may be stunted in the forthcoming festival season due to high lending rates and the industry's inability to offer more discounts.

As consumers pull back, recent sales have been propped up by average rebates totaling Rs40,000, or about 10% the price of a compact car. This includes a combination of cash discounts, free insurance for limited periods, accessories, discounting on car loans and cash for old cars.

"The festival season may not see as much growth as we normally see," said Arvind Saxena, vice-president of sales and marketing at Hyundai's local unit. "Interest rates are really hurting and going forward now, a growth of 14% over last year seems difficult."

Indian automaker Tata Motors is on track to begin selling an ultra-cheap small car next year, a top executive said Wednesday.

Managing director Ravi Kant, however, acknowledged that higher costs may make it difficult to stick to the targeted price of US$2,400, or 100,000 rupees. Steel and rubber prices have risen sharply in the past three years since company chairman Ratan Tata first announced a 100,000-rupee car.

Kant did not say whether the company would revise the price. "Wait for the launch," he told reporters.

"We will launch the car sometime next year," Kant said, addressing speculation that the project could be delayed by new costs and political unrest last year at its new plant in eastern India.

Auto makers from around the world are keenly watching progress in the Tata project, which analysts say could set new price benchmarks and force other manufacturers to follow suit.

India's car sales gained in August at the fastest pace in six months as loan rates declined and companies offered incentives, bolstering demand for Maruti Udyog's SX4 sedan and General Motors' Chevrolet Spark.

Car sales rose 18 per cent from a year earlier to 98,893, the Society of Indian Automobile Manufacturers said in a release in New Delhi. That's faster than July's 11.2 per cent.

Economic growth and stock market gains have boosted wealth, enabling more people to buy a car in a country where only seven in 1,000 people own one. Automakers offered discounts to counter slower sales growth because five-year high interest rates cut demand. Three out of four buyers use loans to buy a car in India.

"Car sales are rising as people have more money, enabling them to indulge in easy spending,'' Amit Kasat, an analyst at Motilal Oswal Securities."The decline in interest rates is definitely one reason that's driving the sales.''

Skoda Fabia with it's exclusive price ready to compete Honda city and Maruti sx4. Price for this fabulous car is Rs 5 to 6 lakh.

Carmaker Skoda India has decided to price Fabia, the hatchback it plans to launch at the Auto Expo in January, in the range of Rs 5-6 lakh.

The car will figure in the segment of mid-size sedans, also called the C segment, even though its dimensions may be different.

With the entry of Maruti Udyog's SX4 and Mahindra Renault's Logan, it has become one of the fastest-growing segments of the Indian passenger car market. Both the new entrants have been giving sleepless nights to Honda Siel, whose City had a free run until recently.

Skoda Auto Chairman Detlef Wittig told Indian journalists on the sidelines of the Frankfurt Motor Show that the company would launch Fabia in the price band of Rs 5 lakh to Rs 6 lakh, in petrol and diesel variants.

Skoda will launch the compact car with up to 10 per cent local content to begin with and raise it to 30 per cent by the end of the first year. Production will begin by the end of October this year and the company will have 500 cars ready by the time of the launch.

Honda Siel Cars India (HSCI)to regain the top slot in the mid-size car segment, has finally launched an all-new variant of its flagship model City in order to give a tough competition to its strong contenders, Maruti SX4 and Mahindra Renault Logan.

All new city has came with a lots of safety features and exclusive price ranges within Rs 6.80 lakh and Rs 8.65 lakh (ex-showroom) Delhi.

The new car has been priced lower than the City ZX VTEC, which comes at an ex-showroom price of Rs 8 lakh in Delhi. On the other side, SX4 range is available at Rs 6.3 to 7.2 lakh while Logan's price band is Rs 4.7 to 6.5 lakh.

Now, to beat the challenge posed by the two contenders, the company has introduce features like anti-lock brake system (ABS), dual SRS air bags, fine leather upholstery and new steering wheel. It is the 10 th anniversary issue from Honda car India and the company has sold a total of 1,96,000 Honda City cars in India since its launch in 1998.

Honda car India has plans to bring in hybrid cars for India auto industry in near future. "Hybrids hold the future and we are working on Honda Civic and Honda Accord for the same. They have gone in for homologation at ARAI," said M Takedagawa, CEO, Honda Siel Cars India.

India's car sales gained in August at the fastest pace in six months as loan rates declined and companies offered incentives, bolstering demand for Maruti Udyog Ltd.'s SX4 sedan and General Motors Corp.'s Chevrolet Spark.

Local car sales rose 18 percent from a year earlier to 98,893, the Society of Indian Automobile Manufacturers said in a release in New Delhi. That's faster than July's 11.2 percent.

Economic growth and stock market gains have boosted wealth, enabling more people to buy a car in a country where only seven in 1,000 people own one. Automakers offered discounts to counter slower sales growth because five-year high interest rates cut demand. Three out of four buyers use loans to buy a car in India.

``Car sales are rising as people have more money, enabling them to indulge in easy spending,'' Amit Kasat, an analyst at Motilal Oswal Securities Ltd., a Mumbai-based brokerage, said in a phone interview. ``The decline in interest rates is definitely one reason that's driving the sales.''

Kasat has a ``buy'' rating on Maruti's stock.

The world's second-fastest-growing major economy is creating jobs, while wages are increasing. Salaries in India my grow an average 14.5 percent this year, the most among Asian countries for a second year in a row, Hewitt Associates Inc. said in March.

Global automakers on the hunt for new and lucrative markets are jostling for a place in India, where the car market is growing at an average of 20 percent a year, outpacing even China.

Getting a foothold in the giant country and economic powerhouse can be a tricky affair - the key to success lies in keeping the price ticket low, squeezing margins. Still, that is not deterring automakers like Renault, Hyundai and others from trying.

"Not being in India would be a huge strategic mistake," Nissan Motor Co. Executive Vice President Carlos Tavares told The Associated Press on the sidelines of the Frankfurt auto show. "It's an investment for the future."

Indian car sales totaled 1.1 million in the year ended in March, with compact hatchbacks accounting for nearly three-quarters of that. Though that number pales in comparison to China, the market is growing much faster.

J.D. Power and Associates predicts annual vehicle sales will nearly double to 2 million by 2012. Manufacturers, using their Indian bases as a low-cost export hub, they say expect annual production to rise well above 3 million by that time.

Takata, the largest Japanese maker of safety equipment for vehicles, plans to build its first factory in India, where economic growth is raising the demand for cars.

The company intends to start producing seatbelts at a factory in Madras in southern India by the end of 2009, Kimio Kobori, a Takata spokesman, said in Tokyo on Monday. The investment and production capacity was not disclosed.

Takata, a supplier to Toyota Motor and General Motors, joins automakers setting up factories in India as vehicle sales increase in the world's second-fastest growing major economy. Carmakers are expected to spend as much as $40 billion in India in the next decade.

"Takata is an early entrant in the Indian seatbelt market, and setting up as a local supplier is a good move," said Takashi Moriwaki, an analyst at Nomura Securities in Tokyo. "Cars in emerging markets are not yet known for their safety, but people are realizing how important it is."

The plant is part of Takata's plan to increase market share in India and the rest of Asia, where the company forecasts sales will rise 81 percent to ¥100 billion, or $881 million, by March 2010 from ¥55.2 billion last fiscal year. The company already has seven production sites in Asia outside of Japan including China, Malaysia, Singapore, South Korea and Thailand.

Banks and finance companies have started offering floating-rate auto loans in order to reduce the impact of high interest rates. Higher rates have led to a decline in sales for most segments of the automobile industry.

ICICI Bank, public sector banks SBI and PNB and Kolkata-based Magnum Finance are offering this product. Based on customer feedback and persistent demand from car companies, banks and finance companies have started floating rate schemes from this month.

ICICI Bank, the market leader in auto loans, is offering floating interest rates on different finance packages from September 1. ICICI Bank auto loans head NR Narayanan told ET, "Customers wanted to hedge the benefits of any changes in interest rates. They had been demanding floating-rate schemes similar to home loans. Now we are offering them the option to take floating interest rates schemes on all kind of cars right from Maruti-800 to luxury marquees like BMW and Mercedes."

This means that the interest payable on auto loans will decline if general rates come down. Of course, the flip side is that if monetary conditions tighten further, borrowers will have to pay more. The consensus is that interest rates are likely to decline over the medium term.

The floating rate options to customers are likely to increase liquidity in the automobile market. It is expected to expand the monthly Rs 3,000 crore auto loan market by 5% in the next two-three months. Officials say this is likely to increase the demand for vehicles in coming months and add around 5,000 new cars to the monthly sales tally.

"With the general perception of interest rates moving southwards, the floating rates option will bring in more customers. As a discount option, we are offering floating rates at 50 basis point lower than fixed rates to lure customers," Mr Narayanan added.

Auto sales have been hit hard by high interest rates. While the passenger car segment has posted a single-digit growth, commercial vehicles sales are flat and two-wheeler sales are down by 10% in the first five months of this fiscal.

The root cause remains high interest rates, forcing customers to postpone their purchases. The current interest rates on auto loans are around 14%, up from last year's average of 8-9%. The impact of rising interest rates had hit most of the car companies, which had posted flat sales for the first five months of this fiscal, Maruti Suzuki being the only exception.

The heavy industry ministry's demand for excise concessions and sops to the automobile industry to boost the sagging demand is unjustified and, if taken seriously, is sure to encourage similar demands from others.

Instead, the ministry should work for an environment that lowers the cost structure of the automobile industry and makes it more competitive. This is particularly relevant if we are to achieve our stated ambition of making India a small car hub for the world.

The sharply lower automobile sales in the current fiscal - April-July two-wheeler sales down 9.2%, passenger vehicle sales up 12.6%, but largely because of additional sales from new models - could largely be attributed to higher interest rates.

It is, however, unlikely that an increase in EMI alone could have affected demand to this extent. In the case of small cars, where the loan amount would be typically Rs 3 lakh, the increase in EMI would be about Rs 600 for a five-year loan.

Even this increase is likely to be made up by discount on ticket price in most cases. In the case of two-wheelers the direct impact of interest rates would be even lower.

Indirect consequences of interest rates such as higher outgo on adjustable home loans are likely to have compromised purchasing power more. The bumper growth of the previous year - passenger vehicle sales increased 21% while two-wheelers were up 11.4% - could also be one possible reason for the low current demand.

The crisis worldwide is surely impacting you as well. Here's how

Yes, all of us would like to believe that we are insulated from the spiralling subprime crisis. And why not, the economy is likely to grow by a good 8.5 per cent, corporate earnings have been reasonably good and credit growth is at a good 20 per cent.

The latter being a clear indication that consumption has not been drastically impacted. And there will be further credit off take during the buying season comes in October.

But here's the bad news. The stock markets have been very turbulent and asset prices have been under pressure. Then of course, there has been inflationary pressures forcing the Reserve Bank of India (RBI) to hike indicative rates like cash reserve ratio (CRR) and repo rate to reign in liquidity.

As far as making big expenditures go, the plasma television or car you have been planning to buy on a personal or car loan may suddenly seems out of reach. And it is simply because of the fact that the interest cost has got higher. Says Harsh Roongta, "Though it is completely dependent on your needs, buying through loans should be completely considered from the end result point of view."

In other words, you need to ask yourself whether you would purchase that good, if there was cash on hand. "As far as purchasing of white goods on loans go, I am advising my clients against it," adds Govind Pathak, director, Acorn Wealth. He feels that in high interest market, it is better to liquidate equity holdings for making such purchases.

The government of India has decided to set up seven more IIMs (Indian Institute Of Management) in the country at a cost of around Rs 200 crore, if the land is provided free-of-cost by state governments, according to media reports. The budget of the project may shoot up if the central government has to pay for the land.

The central government is also looking at the public-private partnership (PPP) model to involve the private sector in setting up more IIT's (Indian Institute Of Technology) and IIM's.

Maruti Suzuki, manufacturer of popular Maruti 800, Zen and SX4 cars has penalised some of its dealers in August 2007 for offering discounts beyond what the company permits, say media reports. In a few cases, it has also suspended dispatches to dealers who are cutting their own margins to woo consumers. According to reports the move is only temporary and only on certain models.

As per Maruti's policy any dealer that offers discounts beyond the stated scheme for that period is fined or its dispatches are suspended for a while.

TVS Motor Company, who plans to foray into the three-wheeler segment, also plans to launch a CNG-powered motorcycle and a new electric scooter by January 2008.

Media reports that the company will spend about Rs 100 crore till 2010 on these new products. It has spent about Rs 700 crore for the development of new products and expansion of capacities since the year 2005.

The company is developing a range of hybrid vehicles for the Indian market. TVS has entered into a technical collaboration with AVL of Austria to develop technology (CC-VTi or controlled combustion variable timing intelligent) for its bikes.

Japanese car manufacturer, Nissan, plans to launch its small car model in the A2 segment by 2009-2010.

Auto components industry sources say that Nissan India's small car model would compete in the A2 segment as defined by automobile body SIAM (Society of Indian Automobile Manufacturers), basically the Zen, Alto, WagonR and Swift.

The car would be manufactured at the Chennai plant, which is a facility being set up in collaboration with sibling company Renault and home-grown M&M. This car is expected to be priced in the Swift and Getz price band.

In February, Mahindra, Renault and Nissan had announced that they would set up a plant in Chennai with an investment of Rs 4,000 crore. The plant will produce models for all three partners and has a capacity of 4 lakh units.

Toyota is set to join the race to go small in India, indicating it is likely to challenge forthcoming cheap compact vehicles from Tata Motor, Renault and Honda.

"We are looking at several markets," said Toyota Chairman Fujio Cho said of his company's plans to build a new small passenger vehicle, adding that India was likely to be the first. But the Japanese automaker has not finalized the kind of small car it wants to build, Cho told media in New Delhi. Toyota will expand near its existing facility in Bangalore if it introduces the car here. The plant has a capacity of 60,000 units and makes Corolla compacts and Innova minivans.

An Indian car maker is getting set to roll out a car next year aimed at those on the lower end of the country's economy. It is expected to extend the dream of car ownership to millions of Indians. Raymond Thibodeaux filed this report from Kochi in India's southwestern Kerala State.

Many Indians predict the country's already jammed streets are going to get even more clogged next year when one of India's top car makers, Tata Motors, rolls out the world's cheapest car. The sticker price? 100,000 rupees, or one lakh in Indian currency. That's about $2,500, half the price of the lowest-priced cars on India's market today.

Still, the one-lakh car - Tata has yet to release its official name - is nearly three times the average per capita income in India.

Only eight in every 1,000 Indians own a car, compared with roughly 500 Europeans out of every 1,000 and 770 Americans. The vast majority of Indians get around on motorcycles or mopeds, or foot.

International car firms are making a beeline for the Indian shore with almost a dozen car rental brands expected to enter the market soon. Soon Indian roads will be flaunting Mercs, Audi and even chauffeur-driven limousines as cabs. Many car rental companies are adding luxury cars to their fleet. While several unorganized car rental players are already offering luxury cars to select customers, the organized players are betting big on the segment.

Commonwealth Games scheduled in 2010 in India, is being seen as the growing prospect for boosting the demand of car rental services.

India's biggest car maker, Maruti Udyog Ltd has extended discounts across its different car models, intending to enhance its August sales. Despite the automobile industry struggling with sales amidst less demand and high interest rates, Maruti has come up with offers and discounts up to Rs 40,000.

The company had in the beginning of this month launched a special discount offer and exchange of programme - Smile India Smile, involving rebates ranging between Rs 7000 and Rs 40,000 on models including M800, Omni, Alto, Zen Estilo, Wagon R, Esteem and Versa. Maruti, which has nearly half of India's market for small cars, has said it would be hard to match its record domestic sales of 2006-07 because of slowing demand. The company has also included a bonus for exchanging old Maruti cars. Under the extended offer, discounts and bonuses range from Rs 12,000 to Rs 45,000, up from Rs 7,000-30,000. Other vehicle makers, such as No. 2 car maker Tata Motors Ltd, have scaled back production as demand has eased.

Even though Indian automobile industry is eyeing a market of 2 million cars by 2010, various automobile projects of industry majors, like Tata Motors and Mahindra and Mahindra (M&M), are running behind schedule.

Tata Motors' Rs 1 lakh car project and M&M's tripartite joint venture in Chennai with Renault and Nissan has been delayed due to local controversies over land acquisition, say news reports.

All automobile projects due to come up in Uttarakhand were halted following a withdrawal of the mandatory environmental clearance by the state pollution control board.

Companies like Hero Honda, Bajaj Auto, Tata Motors, M&M and Ashok Leyland had announced setting up manufacturing facilities in the state, which would collectively entail an investment worth more than Rs 6,000 crore.

The Japanese giant auto, Toyota Motor Corp. enjoys good brisk sales of its fuel-efficient vehicles in the world. The company was going to launch its new high-mileage hybrids with lithium-ion batteries technology in the market. But because of safety reasons it has delayed its hybrids launching.

The Wall Street Journal reported in its online edition, quoting unnamed Toyota executives that the company has delayed its plan of launching its new high-mileage hybrids with lithium-ion batteries technology which were to be rolled out in US market between 2008 and 2010. Toyota's decision was prompted by worries that the batteries could overheat, catch fire or even explode.

Japanese car major Toyota's small car plans for India will either involve a brand new car based on its Yaris platform or an India-specific model developed from scratch.

Sources in the auto industry say that the company is still working out its cost feasibility between these two options although it has already kicked off its second plant plans.

Reports say that Toyota's Indian subsidiary, Toyota Kirloskar Motor may announce its small car project before the end of 2007. The car is being built on a new platform in Toyota's second plant which is likely to come up in Bangalore with an investment of around Rs 2,000 crore.

The American company Ford has short listed the bidders for Jaguar and Rover and had started contacted the companies also. The two Indian companies Tata Motors and Mahindra & Mahindra have also reportedly been short listed as bidders for Ford's luxury brands. The Ford officials have been in touch with both the Indian companies. Korean car company Hyundai which was tapped by Ford has declined the offer.

The officials of Tata Motors, Mahindra & Mahindra and slew of private equity players have started visiting Ford's Jaguar and Land Rover brands may not need to pick up the ailing businesses at one fell jump.

According to the source in the international media, Ford is planning to retain a 30-50% holding in the Jaguar and Land Rover businesses, the backbone of Ford's luxury stable. This development will bring some comfort for the bidders examining the loss-making businesses as it shows Ford is keen to have "skin in the game". It also mirrors the policy will be adopted by the global car makers in the recent months.

The city police claimed to have busted a gang involved in pocketing finance obtained for purchasing cars from various banks by producing fake documents to the financial institutions. senior police superintendent p k tiwari said the gang, led by a former bank employee subhash chandra, managed to collect at least rs three crores from various banks in the names of about 70 prospective buyers and later managed to transfer the amount in their private accounts. tiwari said the activities of the gang came to light on complaint lodged by the manager of the city's kamlanagar branch of the state bank of india against a person who allegedly managed to obtain several loans from the bank with the help of same guaranter. acting on the report, police arrested one raj kumar and his two associates and recovered eleven cars bought against fake documents submitted before the banks, besides rs 82,000 in cash from the gang members. however, the gang leader is still at large, police said.

Auto makers didn't have much to cheer about last month. Though new launches helped some auto makers grow their sales tally, majority reported a decline in sales in July.

Auto analysts have pegged the car market's growth for last month at just 8-9% and this is largely due to Maruti's healthy double digit growth. Two-wheeler manufacturers continued with their dismal show and posted negative growth for the month.

Market leader Maruti Suzuki's cumulative sales were up 24.8% to 57,909 units as compared to 46,408 units sold in July 06. While the company's domestic passenger vehicle sales grew 18%, its passenger car sales was up 17.8% at 52,315 units.

Maruti Suzuki India managing director Jagdish Khattar said the company clocked high double digit growth despite the subdued demand for passenger cars. "June and July have been tough for the industry due to increase in interest rates,'' he said. Maruti exported 5,070 units.

Ahmedabad-based, non-banking finance company, MAS Financial Services Ltd, a specialised retail financing organisation will set up a rural housing and mortgage company in joint collaboration with a leading financial institution.

The company has a focussed-approach in retail asset lending in micro loans, micro-enterprise loans, two-wheeler loans, commercial vehicle loans, pre-owned car loan, mortgage loan and agri-based loan.

The targets customers are urban poor but are self-employed. Customers for the product are made of tea-stall owners, or small time traders.

Bankers have refused to commit whether there will be a hike in car loan rates after the liquidity tightening measures announced by Reserve Bank of India.

The Credit Policy announced by RBI Governor, Dr Yaga Venugopal Reddy has brought about a 50 bps hike in the Cash Reserve (CRR) that the banks should keep with the central bank. There is a general expectation that the policy shall stall the pace at which the interest rates or lending rates were expected to reduce. According to experts, it will take some time (around 10-15 days) to see the effects of the credit policy on the car loan front and the consumers are asked to 'wait and watch'.

There is cause for some worry if we go by what banks have to say. As Ravi Narayan, head of auto financing, ICICI safely puts it, "With a CRR hike, some amount of liquidity is going to be sucked out of the system. As this happens there is a chance of some stress on interest rates. The stress can be with or without an increase in interest rates."

German luxury carmaker BMW gets a good foothold for its products in India. Today company announced the launching of its premium luxury sedan 5 series with prices starting at Rs. 37 lakh and going up to Rs. 45 lakh (ex-showroom). During the launch of sedan 5 series the company said its products are getting good response in India, in view of this it is revising sales target for the country upwards and in response to this it will launch its sports coupe car M Series by next year.

BMW India President Peter Krnoschnabl gave a statement, "Till June-end we have sold a combined of 424 units of our 3 and 7 series sedans. Considering the good response, we are revising our target of 1,000 units set earlier for this year to 1,200 units."
He further added, the company's sales for July is expected to cross the 100 units mark.
"Already we have got good orders for the 5 Series and with the SUV X5 expected to be launched by the year-end, we expect to keep up good growth in India."

Mitsubishi Motors Corporation on Monday said that it would broaden its product portfolio by launching one more car in the coming months.

"We would introduce a new model by the end of this year which would take the total number of products to five,'' R. Santhanam , Managing Director, Hindustan Motors, that has a joint venture with Mitsubishi Motors Corporation, was quoted in Business Line.

The company currently sells four vehicles including Lancer, Cedia, Pajero and Montero, with prices ranging between Rs 6.97 lakh and Rs 34.11 lakh.
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For the first time in his history, Hyundai Motors India Ltd (HMIL), the manufacturer of the popular Santro, Verna, Getz, Accent, Sonata, Elantra and will sell knocked down car kits for assembly in other markets, in an effort to boost export revenue.

According to Heung Soo Lheem, managing director and chief executive of Hyundai India, company plans to sell as much as 50,000 car kits in two years in various markets like Iran, Russia and Ukraine. This is to take advantage of the difference between import taxes on fully built cars and knocked down car kits.For more information check out Car Loan India.

Honda Motors will launch its small segment car in India by 2009-end, said company chairman Satoshi Aoki on the occasion of the foundation stone laying ceremony for its Indian subsidiary Honda Siel cars India's (HSCI) second manufacturing facility located at Tapukara, Rajasthan.

The new 600 acre facility - made at an investment of Rs 1,000 crore - will have an initial annual capacity of 60,000 units, which will later be hiked to 2,00,000 units.

The car will contend with premium end hatchbacks like Maruti Suzuki Swift and Hyundai Getz.for further information just check out Car loan india.

Maruti Udyog has reported 24 per cent rise in sales for the month of June 2007. The company has sold 59,917 vehicles in June 2007 as against 48,425 vehicles sold in June 2006.

If not for the capacity constraints in the production of Maruti SX4 sedan and Swift, the numbers would have gone up much higher, observed industry analysts.

According to a release issued on July 1, 2007, Maruti sold 56,000 units in the domestic market, up 25.5% from 44,626 units in June 2006.The Company exported 3,917 units in June, the release added.for furter information just check out this one Car loan india.

Toyota Motors Corporation, plans to increase its capacity in India 10-fold to 6 lakh by 2015. The company announced the plans in a presentation by its local units managing director Atsushi Toyoshima.

Toyota will be joining the other major international automobile giants like Honda Motors Company and General Motors Corporation that have recently announced plans for major capacity expansion. On the other hand, established domestic players like Maruti Udyog and Hyundai Motors India too are building new factories to cope with increased demand.for further enqueries check out CAR LOAN INDIA.

Honda City has reclaimed its leadership position in the mid-size car segment for the month of June 2007 after being over taken by Maruti SX4 in May. The SX4 had debuted in May, 2007 and had climbed to number one position in the first month.

Honda City made its come back by selling 2,656 units in June as against 1,975 units by Maruti SX4. In May the Maruti SX4 sales stood at 3,000 units as against Honda City's sales of 2,838 units.for further information check out CAR LOAN INDIA.

Maruti Udyog Ltd (MUL) is offering cars on lower interest rates to its component suppliers and their employees to fuel demand in the backdrop of slowing sales hit by high interest rates. As per the Maruti's new plan, the company will finance car purchase by employees of its vendors for low interest rate of his 230 vendors will able to finance the car purchase on the interest rates of 8 per cent.

Reliance Industries Ltd is in talk with major automakers to sell automobiles through its retail outlets, reported Economic Times newspaper on July 11, 2007. According to the report, quoting Bajaj Officials, Reliance recently sent a proposal to Bajaj Auto and Hero Honda to sell their range of motorcycles. The retailing plan is most likely to execute in the large format hypermarkets that Reliance is planning to open on highways.

The Tata group is mulling taking over iconic British brands Land Rover and Jaguar, presently owned by the Ford Motor Company, according to media reports. Both brands hold royal warrants from Queen Elizabeth II and Prince Charles.

Tata might face competition from tractor and utility vehicle major Mahindra & Mahindra. The deal is estimated at being around $1.5 billion. According to industry analysts, Tata might finance the bid in conjunction with Fiat, which owns high-end brands Ferrari and Alfa Romeo. Tata Motors may also be looking to team up with private equity players for the deal.

Soon the Indians will see the international brand cars running on the Indian roads. Many international car firms are making a beeline for the Indian shore with almost a dozen car rental brands expected to enter the market soon. According to industry sources, American car rental major Avis-owned brand Budget is likely to enter the country.

Similarly, US car rental companies Thrifty and Dollar are expected to set up their networks in the country. And it's not just the big three that are looking at India, car rental companies like Enterprise and Vanguard's brands Almo and National are also said to be firming up their Indian plans.

The two big names of the Indian auto industry Tata Motors and Mahindra & Mahindra were most interested in the British brands Jaguar and Land Rover. Ford has short listed the bidders' names in which these two major auto companies Tata Motors and Mahindra & Mahindra have made it.

According to automobile industry sources, officials and Goldman Sachs from Ford Motor all through Monday have been contacting the bidders which have made it to the shortlist. Mr Gardiner, however, refused to comment on whether Ford has worked out a shortlist and if there will be a floor price for the bidders.

Soon Maruti Udyog will be Maruti Suzuki India Ltd. In the new name, Maruti will continue to have a predominant position. Suzuki, in the corporate name, imparts an international dimension. Besides being the parent company, Suzuki Motor Corporation is a leading player in the global automobile market.

This international dimension in the auto major's name will help the company as it expands its role in global markets. Maruti is set to launch a model for export to Europe in the next couple of years, while building on its recent success in Afro-Asian markets. The company is also developing capabilities to become Suzuki's Research & Development hub for Asia, outside Japan.