State Bank cuts loan rates to 10 per cent.
Within 15 days of opening the registration process for Nano, its Rs 1 lakh car, Tata Motors has sold nearly 500,000 application forms, raking in Rs 15 crore (at Rs 300 each). Distributors associated with the Nano bookings said most of the forms were likely to translate into bookings.
The sale of forms started on April 1, bookings began from April 9 and close on April 25.
State Bank of India (SBI), which has now decided to offer loans at 10 per cent during the first year, against 11.75 per cent before, has already issued over 100,000 forms, sources close to the development said. “Out of the total forms, one-fourth has been sold by SBI,” a person familiar with the bookings process told Business Standard.
On the number of bookings so far, a Tata Motors spokesperson described the response as “encouraging”. “The number of booking applications received will be announced after a few days of the closure of the booking process on April 25. All the booking applications will be subjected to a computerised random selection procedure. Within 60 days of the closure of bookings on April 25, Tata Motors will process and announce the allotment of 100,000 cars in the first phase of deliveries,” the spokesperson said in an e-mailed response. Delivery of the car will begin from July, the statement added.
SBI has been distributing the forms since April 5 through its 1,350 branches in more than 850 cities. In all, Tata Motors is using around 30,000 outlets, including group-owned retail chains Croma and Westside, in about 1,000 cities for distribution of forms.
Other financiers with whom Tata Motors has tied up include Tata Motor Finance, ICICI Bank, Axis Bank and Punjab National Bank. The forms are also sold through 218 dealers. In the first lot, each dealer was given 2,500 forms. Almost all of them exhausted these by the end of the third day.
Nano car loans carry a maximum tenure of seven years, against five years for most car loans. Interest rates for Nano are in line with other car loans now, which is estimated at 10-11 per cent. In addition, most banks have also started providing a finance facility for the booking amount of Rs 3,000.