Skoda, ICICI Bank tie up to finance cars  ( December '19,2002, ET)

The price wars in cars now spill over to the finance sector, triggered by Skoda Auto.

The Czech-German car maker has partnered with the ICICI Bank to offer what it calls the ‘Skoda Monthly Instalment’ (SMI) instead of an equated monthly instalment, for its cars, priced between Rs 10.6 lakh to Rs 12.3 lakh, ex showroom, Pune.

It is scheduled to launch a second-hand car scheme in the first quarter of ‘03, to enable an organised exchange programme and certified used cars.

The aggressively priced SMI ranges from Rs 18,300 to Rs 21,525 per month when the loan is of 34 month duration.

The 46-month option has a monthly instalment ranging from Rs 16,300 to Rs 18,825 per month. Both schemes have a ‘bullet’ amount, Rs 3.9 lakh, payable as the 35th instalment and Rs 3.2 lakh as the 47th instalment, respectively.

Bipin Datar, head, sales and marketing, Skoda Auto India, said the scheme was devised on the lines of the ‘Eurofin’ scheme offered by car makers in Europe. He added that they could extend other financial packages through other finance companies.

The typical buyer of the C plus segment car is expected to sell it after three-four years. At this point, the car will fetch an amount which will cover the ‘bullet’ amount.

Parvinder Singh Vijan, managing director, Asset Auto India, admitted that within two days of launching the scheme, it has lead to inquiries from prospective buyers of C segment cars. Existing EMIs on this segment roughly work out to around Rs 30,000.

“We have been receiving inquiries from people looking at cars priced marginally lower than the Octavia and from the higher end luxury cars too,” he said.