Daimler on course to start financial services in India

German auto giant Daimler is entering the financial services business in India.

The Daimler AG board has given its final nod to Daimler Financial Services (DFS), the company’s captive financial services provider, to make a foray into the Indian market.

Daimler is present in India in the luxury car segment through Mercedes Benz (India) Ltd.

Wilfried Aulber, managing director and CEO, Mercedez Benz India, said, “We are in the preparation phase for a Daimler Financial Services operation in India to support all the Daimler commercial vehicle and passenger car brands in the market. We currently have a project team working with our brand colleagues to provide finance, leasing and wholesale solutions in the Indian market.”

DFS product portfolio comprises financing for vehicle inventories, demonstration cars and service vehicles. It also includes financing for real estate (property and dealership) granting of loans for operating materials and the provision of business loans.

“All internal clearances have been taken and we will enter the Indian market subject to certain regulatory clearances required by all non-banking finance companies,” Aulber said. He did not specify a time by which the final launch would happen.

DFS is a leading captive financial services provider for passenger cars and one of the largest CV financers in the world supporting Daimler vehicle sales in more than 40 countries.

“Every third vehicle built by the group is put on the road with the help of DFS,” he said.

DFS India would be an independent subsidiary under the Daimler board.

In the Indian market Mercedes Benz grew 81% selling 4,158 cars between January and September 2010. Its market share in the luxury car segment during the period grew has 4% to 40.5 % during this period.

Mercedes Benz which introduced its used-car business Proven Exclusivity four months back in the Indian market is now extending it to five more cities — Pune, Hyderabad, Bangalore, Kolkata and Jalandhar . It is already present in Mumbai, Delhi, Chennai and Ahmedabad and has sold about 400 cars in the four month since its launch.

“We are ready to go national with our used-car business and also ready with the manpower and working capital. This would be a separate business line for our existing dealerships,” he said.