Honda launches retail finance arm in India with new NBFC subsidiary
Honda Finance India, headquartered in Gurugram, Haryana, was incorporated earlier this month with a capital of ₹ 280 crore, fully funded by Honda Motor Co.
Honda's financing play in India
Honda Finance India, headquartered in Gurugram, Haryana, was incorporated earlier this month with a capital of ₹280 crore, fully funded by Honda Motor Co. The company will apply for a Non-Banking Financial Company (NBFC) license, a regulatory requirement before it can begin operations. Once approved, the subsidiary will extend loans, lease options, and financing packages to customers purchasing Honda motorcycles, cars, and related services.
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The company noted that so far, Indian customers have primarily depended on local banks and financial institutions for vehicle financing. Honda's launch is likely to provide consumers with a more straightforward channel, especially as affordability and variable repayment terms are becoming key determinants of purchase decisions.
Strategic significance
India is the ninth market in the world for Honda to receive a stand-alone financial services unit. Its counterparts are already present in Japan, North America, and Europe, where captive finance units are the backbone of driving sales and increasing brand loyalty. With the establishment of a presence in India, Honda is in line with growing interest in structured finance products in one of the quickest-growing car markets.
The company has appointed Kei Yamada as President of the new entity. Honda said it plans to build long-term relationships with Indian customers by tailoring financing products to regional needs.
Also Read : Toyota reached out to Nissan after Honda merger failed: Report
Preparing for a new mobility era
Apart from traditional loans, Honda is also investigating financial services based on its next-generation vehicle technologies. With the industry moving towards software-defined vehicles (SDVs), the company said that models of financing could change to include services and experiences based on connected vehicle information. This, according to Honda, could not only bring more customer satisfaction but also generate new sources of revenue.
The establishment of Honda Finance India marks a strategic pivot, with the firm placing bets on financial services as a growth driver complementing its traditional product offerings. For Indian buyers, the move could translate into higher choice and easier finance availability at a time when car affordability is under strain.
Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.
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