In a bid to capitalise on the growing demand in the two-wheeler industry, Mahindra & Mahindra Financial Services (simply known as Mahindra Finance) is all set to enter the two-wheeler finance market in India. The company’s venture into the two-wheeler finance industry was revealed by its Managing Director Ramesh Iyer in an interview to the Economic Times.
According to Ramesh Iyer, this move is a part of the company’s expansion drive in the fiscal year 2019. He also noted that Mahindra Finance is adding two more products to its lineup and increase its penetration in rural and semi-urban markets in the country. The company also aims to enter into the consumer durables segment in the upcoming years.
Mahindra has already run pilots for about six months in both these products and obtained successful results. In the two-wheeler financing segment, Mahindra Finance will first provide loans to two-wheelers manufactured by its parent company Mahindra & Mahindra. With the success of this launch, the company will start providing loans for bikes and scooters manufactured by other companies as well.
India is home to the world’s largest two-wheeler market. Most of the leading manufacturers in the country reported strong sales in the past financial year and this is likely to get better in the future. The two-wheeler industry in India reported moderate growth in the fiscal year 2017 with about 6.9% growth. However, growth projections are significantly high for the upcoming years.
Since the economy has recovered from the temporary setback faced by demonetisation and tax reforms, it is expected that the two-wheeler industry will witness double-digit growth in the upcoming years.
Mahindra Finance is one of the major non-banking financial corporations in India with a loan book worth Rs.51,000 crore. The company had a robust financial year with about 81% increase in Q4 profit. The company currently provides financial services in various segments including construction equipment, utility vehicles, commercial vehicles, small and medium business financing, etc.