Finance woes stifle rural auto sales

Lack of easy financing options for rural people in central Uttar Pradesh has affected the growth plans of various auto components and vehicle manufacturers in and around Kanpur. More than 50 small- and medium-scale automotive parts manufacturers in the city have been facing troubles in finding buyers for their products, as the export market has already dried up due to the global economic downturn.

City-based three-wheeler manufacturer JS Auto, which supplies auto components to the TELCO plant in Lucknow, has seen a stunted growth in sales figures, even as the local demand remains unfulfilled. “The culprit is the lack of easy finance options for the rural populace which cannot afford one-time down payment,” pointed out Suresh Puri, the company’s managing director.

 

Puri wants the district-level Rozgar Kendras (employment exchange) to step in and help the unemployed youth arrange funds. “The SC/ST Corporation made for arranging funds for the economically weak have not gained adequate response due to bureaucratic hurdles and lack of awareness. The state government should, therefore, come forward to get the things organised,” added Puri.

The company had recently announced to open a new manufacturing plant in the Rania industrial area on the outskirts of the city, with a production capacity of around 500 three-wheelers every month, with an investment of around Rs 2 crore. But the potential is far from being exploited.

“The banks are not willing to grant loans above Rs 50,000 to our rural customers. This is adversely affecting our sales despite healthy demand compared to the metropolitan markets that are saturated,”added Puri.

Besides, there is a travel limit of 16 km on the three-wheelers. Kanpur Tempo Taxi Mahasangh president Ram Gopal Puri said that the limit should be increased to facilitate easier travel for the passengers and offer competitive freight rates to the small traders, who prefer tempos to trucks.