Hyundai Capital will offer financial services to dealers on vehicle inventory and to individual car buyers at the retail level. (File photo: Reuters)
Korean auto major Hyundai, the second biggest car maker in the country, is planning to bring its captive finance arm, Hyundai Capital to India. It is learnt that the entry of Hyundai Capital may happen in the calendar year 2018, before Hyundai's another brand, Kia, begins the sale of its cars in the local market.
Hyundai Capital will offer financial services to dealers on vehicle inventory and to individual car buyers at the retail level. A feasibility study has been initiated to evaluate its business prospects in India, Hyundai's third-biggest market globally. Hyundai commands a 17 per cent share in the domestic passenger vehicle market with the Hyundai brand. It is now setting up a $1.1-billion manufacturing unit in Andhra Pradesh for the Kia brand, sales for which will begin from 2019. A captive finance facility will support sales and growth of the company in India, the fifth largest and one of the fastest growing car market.
"Hyundai is a global automaker with strong product presence across segments in various markets. We continuously conduct feasibility studies to check new market trends and avail new opportunities, besides taking steps to understand customer needs to capture growing opportunities in global markets," said a spokesperson at Hyundai Motor India in response to queries about the entry of Hyundai Capital. Currently, Hyundai Capital operates in US and European markets.
Captive finance helps car makers to offer financial products tailored to meet the needs of dealerships for dealer inventory and facility financing. These dealers further provide indirect vehicle financing and leasing solutions to retail customers. Global carmakers like Ford, Volkswagen, Mercedes Benz, BMW and Volvo, among others operate their finance arm in the Indian market.
Hyundai, which has sold 4.95 million vehicles in the domestic market, has shipped 2.58 million units to around 87 export markets since its entry in 1996. It clocked a revenue of $5 billion in FY17 and earned a profit of $289 million. The company is looking at ways to further cement its share in India as growth in markets like China is slowing down. Y K Koo, managing director and chief executive officer at Hyundai Motor India had said in an interaction in July that it is his dream to sell a million units annually in the domestic market.