German luxury car and commercial vehicle maker Daimler has received approval from the Reserve Bank of India to setup a “Non-Banking Finance Company” for its financial services business in India. The newly founded Indian company, Daimler Financial Services India Private Limited, will be a 100 percent subsidiary of Daimler AG and is expected to be operational in the 3rd quarter 2011.
Daimler AG’s move to offer financial services in India completes the entry of the German luxury car maker trio into the vehicle finance business. BMW started its financial services arm in October last year, followed by Audi (VW Financial Services) in March ’11.
“With business activities in over 40 countries, Daimler Financial Services is one of the leading automotive financial services companies in the world. Every second passenger car and every fourth commercial vehicle from Daimler is financed or leased by us. India is one of the fastest growing automotive markets and Daimler Group has high expectations from this market.” said Richard Howard, Member of the Board of Management of Daimler Financial Services AG responsible for the region Africa & Asia/Pacific. “Daimler Financial Services India 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 US dollars as part of market entry.”
“By providing innovative and customized finance and insurance solutions to dealers and customers, we intend to enrich the ownership experience of Mercedes-Benz and Bharat Benz branded automotive products, under the Mercedes-Benz Financial and Bharat Benz Financial labels”, said Sidhartha Nair, Managing Director of Daimler Financial Services India Private Limited.
The product range of Daimler Financial Services in India will include financing, leasing, insurance and dealer financing for Mercedes-Benz passenger cars at market launch. The commercial vehicle finance products will be offered, for the newly developed Daimler truck brand for the Indian market, BharatBenz, in 2012 after the start of truck production in Oragadam, close to Chennai.
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 percent compared to the year before, in Brazil the increase was at 35 percent and in China even at 100 percent.