CHOLAMANDALAM AND SWARAJ MAZDA IN STRATEGIC ALLIANCE

Of late we have seen more and more companies coming together from totally different fields, putting together their resources and programs to offer better products and services to customers and explore new marketing opportunities. Cholamandalam Investment and Finance Company and Swaraj Mazda are the latest to buck the trend.

Announcing the strategic alliance between the Chennai-based Cholamandalam and the Punjab-based Swaraj Mazda, M Anandan, Managing Director, Cholamandalam Investment and Finance Company said that, with this Cholamandalam would become the 'preferred financier' for all Swaraj Mazda commercial vehicles. Through this alliance the two companies hope to cash in on each other's strengths and are also looking to explore future opportunities. While Cholamandalam has a strong presence and experience in Vehicle Finance, Swaraj Mazda is the market leader in the LCV segment with a market share of 10%. A common strength for both is the strong presence that they enjoy in the markets in the South and West; Swaraj Mazda enjoys a substantial market share in these markets (60% of its sales comes from the South), while Cholamandalam already has its offices here. Swaraj Mazda's strong presence in the North is what Cholamandalam is looking to leverage on, for its benefit, where it has a very small presence.

P Sivaram, Executive Director (Marketing and Finance), Swaraj Mazda said, "The strategic alliance is intended to assist our customers by providing them with the opportunity to purchase our vehicles through easy finance. This would cut down the cycle time, which is required for approval and sanction raising convenience and service standards for our customers. This will enhance our value proposition by offering the best in class vehicles at a lower monthly cost of ownership".

The customer profile of light commercial vehicles is very different, most buyers are not fleet operators but buy just one or two vehicles when they start. They cannot produce documentation like bank balances or tax returns, but have a very good repayment track record. If at all there are any problems of non-payment of dues, it is not intentional but because the vehicles would not be running on the roads or due to lack of business. It is against this background that the two companies see this strategic alliance as a 'win-win' solution for buyers, dealers, manufacturer and financier alike.

M Anandan said "With the kind of customer profile that we see in this segment, we will have to develop a different credit appraisal system for them. For this the 'Chola' staff will work closely with the dealers. So what the alliance will do is enhance the value to dealers and customers through a customised range of products and solutions".

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