Some Enfield dealers not to get HDFC Bank funding

Private sector lender HDFC Bank has stopped inventory financing for some dealers of Eicher Motors’ Royal Enfield motorbikes as those dealers are well capitalised. These dealers have been communicated about the action.

HDFC Bank clarified that the communication on loan curb was to dealers and not for retail finance.

“It has been sent to dealers who are well capitalised and do not need bank’s funding. Moreover, they comprise a minuscule percentage of the total dealer base,” HDFC Bank said.

Out of about 915 dealers of Royal Enfield, the step has been taken for about 10 dealers, auto mobile industry sources said.

The move comes at a time when the automobile industry is grappling with falling sales and Royal Enfield is no exception.

In June 2019, Royal Enfield sold 24.12% fewer units at 55,082 units as against 72,588 units sold in June 2018. On a month-on-month basis the fall was 8.52% indicating the overall slump in the automotive sector.

Data from the Society of Indian Automobile Manufacturers (SIAM) shows that auto companies sold 16.28% fewer passenger vehicles in June 2019 compared with a year earlier. Two wheeler sales are down 11.7%.