Auto Delinquencies Decline in September Quarter: Fitch
Mumbai: Global rating agency Fitch on Tuesday said auto loans fared better in the September quarter on the back of recovery in Indian economy.
"The domestic auto ABS (asset-backed securitisation) delinquency level (was) off in the September quarter," the agency said in a note. It, however, did not give the exact number on the delinquencies in the reporting quarter.
"The delinquency rate was mostly stable in Q3 (of CY2014), in contrast with the rapid rise to 3.9 per cent in December 2013 and the steady climb in H1 of the current fiscal."
According to Fitch, the upturn in economic growth, which helps the commercial vehicles the most, is one of the primary reasons for the stability in performance of the auto loan repayments.
Fitch expects India's GDP growth, which came at 4.7 per cent and 4.5 per cent in FY14 and FY13 respectively, to increase to 5.5 per cent this fiscal year. In the first quarter, the economy expanded by 5.7 per cent.
The agency said tighter underwriting and collection standards also helped in stabilising the delinquency rates.
"Tighter underwriting and collection include setting lower loan-to-value criteria, reviewing maximum loan tenors, enhancing collection and servicing techniques."
Auto sales have also been picking in recent months after de-growing throughout last fiscal, indicating improved consumer sentiment.
As per the Society of Indian Automobile Manufacturers (SIAM), in August car sales jumped 15.16 per cent to 1,53,758 units compared to 1,33,513 in the same month of 2013. Motorcycle sales during the month grew 14.45 per cent to 9,10,312 units as against 7,95,411 in August last year.
In September, too, auto sales rose with Maruti Suzuki, Hyundai, Honda, Toyota and M&M reporting good growth ahead of the festive season. However, Tata Motors, GM and Ford reported decline in sales.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
