Honda Motorcycles & Scooter India entered a retail finance partnership with Cholamandalam Investment & Finance Co. last week, two months after inking an agreement with Indian lender IDFC First Bank.
The moves come on the heels of declining two-wheeler sales for Honda in India. Honda India sold 24.5 million motorcycles and scooters for the fiscal year ended March 31, down 15.7% from the prior-year period.
“Increase in two-wheeler ownership cost post-insurance premium hike and new brake regulations is resulting in increased percentage of new customers availing retail finance to purchase their favorite two-wheeler,” said Yadvinder Singh Guleria, senior vice president of sales and marketing for Honda Motorcycle & Scooter India, in a press release. “We believe that consumer shift towards retail finance will accelerate even more in the coming year.”
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Customers financing with Cholamandalam will save an average of 10% on a 60,000 rupee ($874) loan. Other terms include a 97% loan-to-value ratio, a 36-month repayment period, zero processing fees and a minimum down payment of 2,999 rupees ($44). The financing company has more than 1,000 branches across India.
Meanwhile, the IDFC First Bank partnership allows for a 100% LTV and loans as long as 48 months. The minimum down payment requirement is 999 rupees ($15), and savings are expected to average 5,000 rupees ($73) per loan. The bank has more than 200 branches across India.