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Triumph Motorcycles offers 7-year loan scheme to make its bikes more affordable

LiveMint logoLiveMint 25-08-2017 Shally Seth Mohile

Mumbai: British motorcycle maker Triumph Motorcycles is pulling all stops to make its models more affordable in India. After stitching a global alliance with Bajaj Auto Ltd to produce the mid-segment bikes locally, the iconic brand is now using an attractive finance scheme to make the high-end models easy on the wallets. The maker of Bonneville brand through a tie-up with HDFC Bank Ltd is offering a seven-year loan for all its models.

The move, said Vimal Sumbly, managing director at Triumph, is a first for a premium two-wheeler maker and will help the company attract all those who could have otherwise not afford the bikes. Triumph’s motorcycles range in India starts from Rs7.30 lakh and goes up to Rs23 lakh. Typically, two-wheeler loans on super bikes are offered for a tenure that ranges from three to five years.

“HDFC has been our preferred financier. Owing to a huge portfolio of models that we have and a profile of customers that have a clean credit history, they are now offering a loan for seven years with an interest of 11.5%,” said Sumbly. An email sent to HDFC Bank on Thursday remained unanswered.

Among other factors, easy finance schemes have been fuelling growth in the super bike segment that used to be the preserve of the select few, till five years ago. Sales of super bikes (those with engine capacity of more than 500cc) have been growing at a brisk pace. From 500 units a year in 2008, it grew to 10,000 units in the calendar year 2016 and is expected to double in the next three years, said Sumbly.

He added that he expects the market to go the luxury car way in India, which too has been advancing at a fast clip albeit with some hiccups since the last two years, due to regulatory and policy changes.

Banks are keen to ride the bandwagon and have designed specific schemes to address the market. HDFC Bank, for instance, offers a separate two-wheeler loan scheme called “Super Bike Loan” as per its website. The scheme offers funding of up to 85% of the bike’s cost which can go up to 90% depending on the buyer profile and credit history. It also provides funding up to Rs2 lakh for accessories. The interest rate for this scheme is 12.9%, which is comparatively less than other two-wheeler loan schemes.

Seven out of every 10 models sold by Triumph in India are bought on credit. Of this, half the buyers take a loan for one-and-half to two years, the remaining do it for three to five years.

Launched at the beginning of this month, ahead of the festive season, the seven-year loan scheme, said Sumbly, will add momentum to sales volumes. “The scheme will take care of the festive season. The Triumph models now become affordable at a monthly instalment of Rs8,000 to Rs10,000,” he said, adding the company was earlier offering the scheme only for a couple of high-end models, but now the scheme is applicable for all the models across its range.

“While it (the seven-year loan scheme) sounds attractive, it’s unlikely that buyers will want to take a liability for such a long tenure given the shrinking life-cycle of models,” said an analyst at a consulting firm. Some of the public sector banks dabbled with the seven-year schemes for small cars seven to eight years ago but most of it have been discontinued now as it’s “fraught with risk”, he added.

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