Tata Motors sets up separate financing co
The Times of India — August 26, 2006

Tata Motors, India's largest truck-maker, has set up a separate company for its vehicle financing operations.

The new entity, TML Financial Services (TMLFSL), is a 100 per cent subsidiary and will function as a non-banking finance company, Tata Motors said in a statement. The outfit recently received approval from the Reserve Bank. At present, the vehicle financing business is carried out by Tata Motors under the name Tata Motor Finance and Tata group sources said that the division would be merged with TMLFSL at a later date.

Aubrey Rebello, chief executive officer, TMLFSL, said that the expansion of the financing business will be undertaken by TMLFSL.

The overall vehicle financing done by Tata Motors' auto financing arm in 2005-06 was around Rs 5,500 crore, a 60 per cent increase over Rs 3,400 crore in the previous year.

Rebello also added that TMLFSL, at a later stage, would be looking beyond vehicle financing and would look at entering a gamut of financial services.

To begin with, it could become a distribution channel for products like insurance, mutual funds and credit cards among others.

Explaining the rationale behind the move, Rebello said the auto financing business has been growing at a fast pace and requires funds.

Tata Motors entered this business in 1957 under the bureau of hire purchase and credit division. Apart from Tata Motors, another Tata group company — Tata Finance — was also doing the same business.