Tata Motors sets up new subsidiary for vehicle financing

Mumbai: Tata Motors has set up a 100-per cent subsidiary, TML Financial Services Ltd. (TMLFSL), for its vehicle financing operations.

The new entity will function as a non-banking finance company, for which it has received the necessary approval from the Reserve Bank of India.

TMLFSL will support and enhance the vehicle financing activities of Tata Motorfinance.

Tata Motors' auto financing business posted a 60 per cent jump in vehicle financing for the year 2005-06, at about Rs5,500 crore, against Rs3,400 crore in the previous fiscal.

In 2005-06, Tata Motorfinance accounted for 23.8 per cent of Tata Motors domestic sales. A total of about 113,000 contracts were booked, including refinance and construction equipment, while 96,247 new vehicles were financed, a 43 per cent increase compared to 67,356 vehicles in 2004-05.

Refinance business grew by 110 per cent, while construction equipment business grew by 165 per cent in 2005-06.