German automaker Daimler today said it will set up a non-banking financial services firm in India with an initial investment of over $50 million (around Rs 222 crore) to enable financing of its vehicles to consumers.
The company has already received approval from the Reserve Bank of India (RBI) to set up Daimler Financial Services India (DFSI), a 100% subsidiary of Daimler AG which is expected to be operational in the third quarter of 2011.
"DFSI will support the sales of Mercedes-Benz cars and Daimler trucks as we see a large demand for financing solutions in the market. We will initially invest upwards of $50 million as part of market entry," Daimler Financial Services AG Member of the Board Richard Howard said in a statement.
The product range of DFSI will include financing, leasing, insurance and dealer financing for Mercedes-Benz passenger cars.
Finance will also be offered for the newly developed Daimler truck brand for the Indian market, BharatBenz, in 2012 after the start of truck production in Oragadam near Chennai.
"By providing innovative, customised finance and insurance solutions to dealers and customers, we intend to enrich the ownership experience of Mercedes-Benz and Bharat Benz branded automotive products...," DFSI Managing Director Sidhartha Nair said.
As per the company's statistics, every second passenger car and every fourth commercial vehicle of the Daimler group sold worldwide is financed or leased by Daimler Financial Services.
Daimler Financial Services AG, the financial services arm of Daimler AG based in Berlin, has shown strong growth in the three other BRIC markets.
"Until year-end 2010, contract volume of Daimler Financial Services in Russia increased by 25% compared to the year before, in Brazil the increase was at 35% and in China at 100%," the statement added.