Nano finance options to be offered by Tata Motors

Tata Motors is weighing options on extending loans for the Tata Nano through its subsidiary company Tata Motors Finance. It may also seek the aid of its existing financing channels to make this possible. A report says that such a move could be seen as something against the industry practice where hire-purchase deals are signed by dealers and not by manufacturers. The group’s priority is to provide financial support through TMFL. The company is also talking to ICICI Bank, State Bank of India and HDFC Bank. The Tatas are looking at forging an exclusive partnership for the Nano.

But then, Tata Motors might tread the fresh path in an effort to strengthen its distribution strategy for the Nano. It is said that the company has already begum parleys with leading vehicle loan providers in the country to this effect. This is said to be in line with the existing financing options with a down payment and the rest in installments.

Though the company does not want to share any information on the financing of Nano at this stage, it is believed that profits from financing of the car will be lower than from normal cars.The popularity of two-wheelers in the country is due to the easy financing options available.

The Tata Nano, with its huge fan following, is likely to help Tata Motors to sell as many as 60,000-65,000 units in the first year of launch. Demand could go up helping the company sell around 150,000-180,000 in the second year and around 210,000 units in the third year.