Post Covid-19 lockdowns, demand for vehicle loans is rising, says financier

Cholamandalam Investment and Finance Company Ltd., a vehicle financier, is seeing a rise in demand for personal mobility vehicle loans as the nation emerges from coronavirus-induced lockdowns.

“The need for personal transportation is going up,” said Chief Financial Officer Arulselvan D. in response to a question about the impact of the pandemic. “We are seeing good demand for entry-level cars and two wheelers.” Sales of used vehicles may see a spurt as new vehicles may be costlier because of upgraded emission norms, he said.

ALSO READ: Auto manufacturers let go of contractual workers as slowdown bites

Sale of cars and two wheelers in India are slowly rising after witnessing near zero sales in April as the country went into a total lockdown to prevent the spread of Public transportation such as buses, trains and metros are shut in many parts of the country making it difficult for millions to travel for work without a personal vehicle.

ALSO READ: Icra revises FY21 2-wheeler sales forecasts downward, says may dip 16-18{bce2ac57dae147ae13b811f47f24d80c66c6ab504b39dda4a9b6e8ac93725942}

The lockdown, which impacted the movement of vehicles across states, and subdued economic growth in the last few years impacted sales of commercial vehicles. Now, the financier is betting that sales of commercial vehicles will pick up after monsoon rains end and the festival season begins, Arulselvan said in an emailed response to questions.

The company is focusing on effective underwriting and “intense collection efforts” to keep delinquencies at bay, he said.