Hyundai Motors India Ltd., has announced a collaboration with ALD Automotive to introduce car leasing scheme for all of its products. ALD Automotive, one of the leading automotive leasing and fleet management firms, will be leasing Hyundai vehicles across Bangalore, Delhi, Chennai, Hyderabad, Mumbai and Delhi NCR in the first phase.
Without revealing the numbers, Hyundai India says that the leasing plan will come with ‘extremely attractive’ monthly rental. Under the leasing scheme, customers need not pay a huge upfront cost (down payment), and there is no financial risk. Further advantages of leasing a vehicle include better tax management, easy upgradation and peace of mind as the cost covers both maintenance and insurance.
Depending on the city and model selected, customers have a option of leasing the vehicle between 2 and 5 years. Announcing the lease offering, Mr. S.J. Ha, Executive Director, Sales and Marketing, Hyundai Motor India stated that leasing business is picking up pace in India and offers great prospects.
As of now, less than 1% of cars in India are bought under the leasing scheme and is mainly popular in the corporate circles for premium company cars. In contrast, the concept of leasing the car rather than buying it with a loan is quite popular in developed countries (market share of leased cars in certain countries goes as high as 45%).
With the leasing scheme, Hyundai India targets salaried individuals, owners of small and medium sized enterprises, public sector and corporates. With young audience open to embracing new concepts of vehicle ownership, leasing is expected to play an important role in bringing sales growth for OEMs in the coming years.
The new crash test standards and emission norms are set to inflate the price tag of cars in India to a significant extent. Considering that the car loan schemes are not going to change much in response, the price hike would directly translate into much higher down payment. This could serve as an adequate motivation for car buyers, especially the urban dwellers, to opt for leasing schemes. So, we expect other mass market OEMs to launch leasing schemes over the course of this year.
