Hyundai, Daewoo Plan Auto Fin Subsidiaries

South Korean auto makers, Hyundai and Daewoo, are planning to bring their auto finance subsidiaries to India in a run up to the launch of their respective small cars later this year. The two auto companies have had a series of discussions with Lloyds Finance to use Lloyds Finances distribution network for their car finance business, and to gear up for the launch of their respective small cars later this year. Lloyds Finance is one of the larger auto finance companies in the country.

The auto finance arms of other foreign auto manufacturers like Ford and General Motors already have a presence in the country for some time now. While Ford Credit has signed up with Kotak Mahindra, GMs auto finance arm, GM Acceptance Corp, has set up a 51:49 joint venture with 20th Century Finance earlier last year in an attempt set up a finance network to service customers.

 

While Hyundai proposes to launch the 999cc Santro in October this year, Daewoo intends to introduce the 796cc, petrol driven DArts at around the same time. With the Telco 1400cc Mint to make an entry in end 1998, the auto market is expected to see intense competition, and the two Korean auto majors plan to have an effective car finance set up in place to face the competitive environment.

The rumblings of things to come was apparent when Daewoo dropped prices of the Cielo by over a lakh and a half some time ago, a move which helped the company post a three-fold rise in sales. Maruti too is planning to drop prices of its best seller, the Zen, in a bid to prepare grounds for the times ahead.

While Telco plans to launch both the petrol and the diesel versions of the Mint, Daewoo, and Maruti are also contemplating launching diesel versions of their models.

The small car segment which includes vehicles in the Rs 3-3.5 lakh range, will see the Marutis 800, and Zen battling for their turf with Huyndais Santro, Daewoos DArts, and Telcos Mint.

In the mid sized car segment too Fiat is planning to launch its diesel Uno version soon, while Mitshubishi and GM propose to launch the diesel versions of the Lancer and the Astra.

Hyundai plans to launch a new version of the Accent in the Indian market by the end of next year. This car will be modified version of the Accent and will be offered in two models namely the 1.3 litre and 1.5 litre engine displacements.

Daewoo intends to sell the Cielo till 2001. The company plans to launch a bus and expand its commercial vehicle sector this year. It is also planing to launch trucks and its small car in the second half of the current year. Daewoo intends to attain 43 per cent share of the automotive market this year itself.