1) Develop new product:

TYRE FINANCING

Tyres off take by different automobile segments directly reflect the pace of economic activities in a

country. The performance of commercial vehicle tyres is directly linked to the country’s economic

development. India, being the world’s second most populous and seventh largest country in area, has

been seen a tremendous GDP growth for the last few years which transform into the dynamic

developments of various industries, including automobile and tyres.

The top tyre companies almost account for over 85% of total tyre production including, MRF, CEAT,

APOLLO, JK, Bridgestone India, Goodyear India and Falcon Tyres. The total number of tyre dealers,

geographically spread all over the country is over 5,000 - serviced through over 500 depots of tyre

companies. A vast majority of dealers handle Multi-brands of tyres. Tyre companies also have

exclusive retail distribution outlets.

Potential Customer Segments

Our potential customers are our existing group of customers, who are in the segment of

Tractor

LCV&HCV

CE

In Hubli branch there is approximate 1800 contracts, in which 61 CV customer are there. And there is 677

tractor customers. And 174 auto other than 3 wheelers, Gio ,Maximo contracts.

Therefore these 912 customers are our potential customer.

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TRACTOR74%

CV7%

AUTO19%

CUSTOMER MIX

(Above chart shows percentage of our existing customers.)

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Product Details

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DIFFERENT TYPES OF TYRES

Farm Services

Tractor Rear

Tractor Front

Tractor Trailer

Power Tiller

Fork Lift Industrial - Pneumatic

Fork Lift Industrial - Solid

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Trucks-Buses

Superlug 50

Superlug 50 Plus

Superug 78

Superlug 505

Superlug 50 Plus R

M-77

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Musclerok

Musclerok X

The Lug Plus

Super Lug 50 FS

Steel Muscle S1R4

Steel Muscle S1L6

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Steel Muscle S3D4 Steel Muscle S1T4

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The tyre wear and tear depends upon how driver will use vehicle and soil type and geographical

conditions. Above given price are average price calculated on the market price.

Economy: The district falls in Tropical Region, which is largely affected by monsoons. This explains

that the district is an agro-based economy, and also that agriculture is the main occupation in the

whole of rural area of the district. The prestigious University of Agricultural Sciences at

Dharwad has discovered new species of cotton and chillies, which is the first of its kind in the

world. The existence of this prestigious institution has boosted the agro-based industries in the

district.

 

Therefore other activities of economy, i.e., trade and commerce are completely dependent on

agriculture.  As monsoon is highly uncertain in nature and as there is no major irrigation project

or any hydal power generating station in the district, there is high degree of dry-land farming.

 

The mineral wealth is not quite impressive and forest wealth is equally unattractive.

Manufacturing industry, particularly agro-based industry makes a significant contribution to the

economy.  Hubli-Dharwad is two of the major commercial centres in the State. 

 

Of the total population, 39% makes up for working class. This consists of 26% of those

engaged in agriculture sector. Till today, agriculture is a labour intensive enterprise. Many

labourers largely depend on seasonal employment. The per capita income at current prices is

Rs.14861 and at constant prices [93-94] it is Rs.10462.  The State level per capita income at

current prices is Rs.14909.  The main kharif crops are; cotton, chilies, sugarcane and groundnuts,

and the main Rabi crops are jowar, wheat, rice etc.    Out of total cultivated land, only 12.10% is

irrigated [as per the 4th Economic Survey – 1998]. On the industrial side, it is seen that there are

50602 industrial units existing in the district. The district has as many as 216 banks and 535

ration shops.

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SCHEME DETAILS

Who can apply for our Tyre Finance scheme?

EXISTING CUSTOMERS WHO ARE:

Fleet operators – big or small / retail

Corporates who own light/medium/heavy commercial vehicles including buses

Other existing customers who have good track with us.

How does our Tyre Finance scheme work for you?

A credit limit is fixed based on your fleet size, activity level, and the security offered

Finance can be drawn as and when a requirement to purchase tyres arises, within the fixed credit limit

Benefits of our Tyre Finance scheme

Finance up to 70-80% of the invoice value

Flexibility of finance for any brand of tyres

Any number of tyres with a minimum of 2 tyres for HCV’s and 4 tyres for LCV’s.

Advantages of our Tyre Finance scheme:

Your fleet’s working capital requirement is eased considerably

We have a Pan-India network of more than 500 branches from where you may avail the finance scheme

Repayment in 3 convenient EMIs

How long will it take for you to receive your tyres?

Not more then 2-3 days at the maximum. Simple documentation and quick processing shortens the time for you to receive the tyres.

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Price list of MRF

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TYRE FINANCE SCHEME:

Tyre financing scheme should be introduced for our existing customers who have good track record for

our HCV as well as CE customers. Tyre financing will serve the purpose of top up instant loan and

fulfill the temporary financial needs of the customers.

Benefits of Tyre Finance scheme:

Finance up to 70% of the invoice value. Flexibility of finance for any brand of tyres which will be an add-on service. Up to 70% funding on the invoice price. Tenure: maximum of not exceeding more than six months.

Rate of Interest:

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FOR CES PROFILE CUSTOMERS:

ROI: 18%

FOR SUS PROFILE CUSTOMERS:

ROI: 20%

FOR FTU PROFILE CUSTOMERS:

ROI: 22%

Processing fees: Rs.1000/-

DOCUMENTS REQUIRED

All KYC Documents Original Invoice Photographs Bond Paper (Rs.100/-)

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DESIGN A STARTEGY

A. Product Market and competitions:

Product Market:

Product Market:

As per SIAM (Society of Indian Automobile Manufacturers)

The classification of segments are done as per length of the vehicle, (Passenger car segment)

A1 - Mini - Up to 3400mm (M800, Nano)

A2 – Compact - 3401 to 4000mm (Alto, wagon r, Zen, i10, A-star, Swift, i20)

A3 – Midsize - 4001 to 4500mm (City, Sx4, Dzire, Logan, Accent, Fiesta, Verna etc)

A4 – Executive - 4501 to 4700mm (Corolla, civic, C class, Optra, Octavia, etc)

A5 - Premium - 4701 to 5000mm (Camry, E class, Accord, Sonata, Laura, Superb, etc)

A6 – Luxury - Above 5000mm (S class, 5 series etc)

B1 – Van - Omni, Versa, Magic etc

B2 - MUV/MPV - Innova, Tavera, Sumo etc

SUV - CRV, Vitara etc

A segment, B segment etc were used earlier, though new terms came, still old one is used most

popularly.

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But now the segmentation in India is done on the basis of length

To compete with the competition a number. of strategies need to be implemented.

To Increase our Market share in used car or truck dealers the following steps should be taken:

As the volume of business is driven by A2 segment, To Increase volumes this segment should be

tapped. Further most of the cars in this segment are mainly purchased for personal use, So to

capture market share, MMFSL needs to do the following:

Reduce TAT by having a Counter Executive to address the customer at the dealers place. This

will further help in completing the FI for Documents disbursed by the dealer on the same or next

day, hence faster Payments and Faster delivery of the car to the customer.

Introduce competitive schemes which are in par with the competitors in NBFC sector.

Maximum time should be fixed for FI and it should be 1 day from the date of collection of

documents from the dealer.

PDD Collection should be the job responsibility of our Executive who should collect it, which

would result in quicker disbursements of Payments due to the dealer.

The company should ensure that the PDD collection procedure should be at par with the

competitors for e.g. collection of the duplicate key, the competitors are not collecting it.

Tap the Used Car Market :

1. Used Car Market is one new Opportunity for Mahindra Finance to increase its Market

share .There are limited players in the Market limited to HDFC, Axis, Reliance and Magma .As

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the Funding percentage is low on the Overall Price, there are lesser chances of Loan turning to an

NPA on the customers part and also Risk is Low as the customer has already paid a substantial

amount.

2. The Market is expected to grow higher as there are many new launches from all major

Automakers from Small Cars, Sedans to Luxury Cars.

3. Classify the dealers on the bases of potential of Volume of Business that Mahindra Finance can

raise from them.

4. Category I –Will be dealers who have sales of 100 or more vehicles through In house finance to

Mahindra Finance every year. These are the dealers where Mahindra finance has to obtain a

Chunk of Business as the volumes are high.

5. These are the dealers who should be provided with an in house executive so that service levels are

high and also Turn Around time is low and the Process time is fast.

6. Category II-Will be the dealers whose sales to Mahindra Finance falls between 15 and 100.These

dealers must be concentrated and executive must be allotted area wise.

7. Category III-Will be the dealers whose sales are less than 15 to Mahindra Finance every year.

Executives must be sent here on case to case basis only when required.

8. Cancellation of Cases in the used car Market must be case to case basis and not on the entire

brand

9. Look for Increasing Mahindra Finance’s share in M&M counters –By having Schemes with Low

IRR for Mahindra Vehicles, Mahindra Finance can capture the entire Market for NBFC’s in

M&M dealers, which in the present context is not so .Hence the low IRR can be offset by

increase in the Volumes and hence substantial Profits.

10. Look at new Dealer tie –ups so that we can get some extra business.

11. Awareness of RTGS, NEFT for Online fund Transfer .Hence Process time can be minimized and

dealer satisfaction will be high Implementation of RTGS and NEFT should be for these dealers

only to get cost revenue pay off.

12. Pay –out settlements: Since the whole business model depends on business sourced from the

dealer and Pay-outs in return. Holding off Payouts will result in lesser business sourced

eventually. So pay outs should be held off only to those cases where PDD or documents are

pending and not the dealers pay-outs as a whole.

3. Articulate an Implementation plan (what the branch should do):

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a) Target Fixation for Business Executives:

i. The Branch should Fix Target slabs for the Executives and Incentive plan for different Slabs.

ii. They should communicate to the Executives the new Incentive plan for business and also the

payment which is according to the current Incentive scheme of RBMI which is quarterly and any Non

starters arising out of this will be deducted from the Incentives.

b) Area wise Allocation of Collection Executives:

Collection executives generally have to go around the city for different customers. They get files allotted

to them. Two different executives may get two different customers residing in the same area. So if

area wise allotment is done, then a single executive can handle a particular area.

The Branch should:

1. Allocate Collection Executives based on Area and make sure there is no two Executives going to two

customers residing in the same area.

2. Have a Review on the Executives Conveyance every month and see that they are not claiming more

than what they have actually travelled.

3. As it is Area wise make sure that the Executives fix their appointments Area wise and not customer

wise unless there is a urgent need for the same or unavoidable appointments.

c. Tele-callers:

1. The Tele-callers must be trained to Use the system to do the following:

i. Track the customer’s mobile no and Place of Residence according to what he has given in the FI

any changes must be made in the system.

ii. All communications with the customers must be with the Customer ID provided to the customers.

This way the customer remembers his ID and it is useful to track good customers and also to track if

the customer is retained by the company.

iii. The Branch should also make the practise of communicating to all its customers about the call

centre no and any query to go to them .This way the Query of the customer is addressed effectively. If

the tele-caller cannot address the query of the customer same should be transferred to the respective

BIC.

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iv. There should be one tele-calling centre per state and have access to all the contracts in that state,

preferably in the metro where no of contracts handled is of higher volume .All the calls of the

customers in a particular state must go that tele-calling centre. The tele-callers must have access to

the database of all the contracts handled in the state. Or for every 1,000 contracts the Branch should

hire 1 Tele-caller and all tele-callers must have access to the same database.

v. The tele-callers must be trained to ask the customer his address of residence and Mobile no every

time the customer calls the call centre. Hence make changes in the customers profile if any. This

database must be accessible to all the Employees from AM, TM, BIC and Executives.

vi. The tele-caller must also be trained to talk to good customers and inform them of the benefits of

not defaulting in their term and also ask them for references.

d. Table collection:

1. The company should communicate to the customers when entering the contract that the customers must

pay the visiting charges of Rs 300 every time the Executive visits the customers. This will be helpful

to the Executives when they are visiting the customer’s, as now they are not collecting any visiting

charges from the customers.

2. This will be helpful in adjusting the cost to the company incurred in form of conveyance to the

executives.

3. This will also help in Increasing the no of customer’s visiting the Branch and hence lesser cost to the

company in reaching out to its customers.

4. All the customers visiting the Branch must be asked for references and also the Reward structure for

the same.

e. Turn Around Time:

The Branch must do the following:

The Branch has already hired Dealer point Executives to reduce this .The Branch should track the DPE’s

every week when they come to the Branch based on status of the cases which are handled by DPE

like Communication of FI status ,PDD collection and Payment to the dealer . This way the TAT can

be reduced effectively.

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f. Customer Retention:

The Branch should:

1. Communicate to all its customers at the time of taking the loan or in any interactions with the good

customers the benefits of being a good customer like 1 EMI waived off for customers with 3 or less

than 3 defaults in their entire tenure.

2. Talk to customers who have a good track record when they visit the branch or tele-callers side and

inform them about taking a second loan from the company and getting a IRR waive off upfront.

3. Communicate to all customers when entering into agreement, visiting Branch or Interaction with the

tele-caller about the Reference reward program.

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