Tata Motors comes up with fast-track loan clearance to boost Nano sales

Tata Motors is pulling out all stops to shore up the sagging sales of Nano.

After coming up with a slew of incentives recently, it has now announced loan clearances for the car within 48 hours to attract a new set of customers and is also looking to ease loan procedures at other banks with which it has tie-ups.

The fast-track loan scheme by Tata Motors Finance will benefit those potential customers who do not have specified monthly income, for example the small-time entrepreneurs.

The clearance will be done in 48 hours, as against 7-8 days taken earlier to go through the entire profile of the customers and clear it.
The company is also in talks with other financiers to come up with attractive schemes for the Nano customers.

“We are talking to a few banks progressively to ease off the loan procedure. We will soon be announcing more details on it,” said a company spokesperson.

Tata Motors has financing arrangements with 26 financiers across NBFCs, public sector banks, co-operative banks and private financiers. More at a local level are being discussed.

To facilitate financier-customer interaction, Tata Motors is working with financiers, at national, regional, state and even branch levels for smooth and effective functioning.

Apart from this, to ensure better customer buying experience, Tata Motors has set up special access points, in addition to showrooms, where prospective customers can come and experience the car.

The profile of such customers is that of a two-wheeler purchaser or those who do not own any personal mobility at all.

When asked about the credit risk, the company spokesperson said, “We had announced similar schemes when we had launched Ace, where the prospective buyers were entrepreneurs and transporters. We found the rate of default was almost negligible. We expect similar response for this initiative.”

Mahantesh Sabarad, senior vice-president - equity research, Fortune Securities, said, “Financing has been one of the hurdles for the sales of Nano. Tata Motors Finance should have taken this move much before. There will also be a credit risk as these are the customers with no regular source of income. However, Tata Motors have been dealing with such customers who are buyers of Ace/Magic.”

TMF will provide finance up to 90% for the Tata Nano, at easy rates. TMF, which provides customer finance for all Tata Motors vehicles, is present in all its 540 passenger vehicles outlets.

Nano sales were at an all-time low in November when it sold 509 units. Since July 2009, when despatches to those who had booked the car started, the company has delivered over 71,000 Nanos.