Notwithstanding low business confidence in Kashmir due to fragile situation, about 30,000 new cars hit the valley roads in 2018 thanks to easy bank finances.
More than 93 percent of the cars – 28,000 out of 30,000 –have been purchased with the borrowed money from the banks, official figuresand financial institutions data has revealed. As per official figures, out ofthe total 80,000 automobiles that were registered with regional transportoffice Kashmir in 2018, which also includes two-wheelers, 30,000 are privatecars.
Regional transport officer (RTO), Kashmir, EkramullahTaksaid there has been a steady growth of car registrations during last few years,adding that even two-wheeler registrations have also seen a boom with almost 50percent growth. “Easy finance coupled with new launches and a four-wheelerbecoming a necessity has propelled the car growth in Kashmir. While cars havebeen the most hot selling category of automobiles, 2-wheelers especiallyscooties have also seen a steady growth,” said Tak.
Even as Tak says that various government incentives for busowners will help growth of public transport in days to come, a J&K Banksurvey done earlier this year on vehicles in the Valley says reason forpopularity of cars in Kashmir is poor public transport. Even as per the dataavailable with the national portal Parivahan, the sales of buses are oncontinuous decline in the state.
Interestingly, industry insiders say that southern Kashmirdistricts which are divided into two business zones by car finance companies,despite uncertain situation, have been witnessing brisk car sales in both thezones which includes Anantnag-Kulgam and Shopian-Pulwama districts. WhileSrinagar and Budgam as per car finance business are stagnant markets, northKashmir districts are emerging markets.
Amongst the all, the main contributing factor in spurt ofcar sales in Kashmir is the easy finances offered by financial institutions. InaRs 1000-crore car finance market in the valley, J&K Bank which claims tohold 80 percent market share in this business says it has financed almost20,000 cars in the Valley during last one year.
Talking to Greater Kashmir, RakeshGandotra, president,J&K Bank said it saw almost 40 percent increase in its car finance businessduring last 1 year.
“Out of the 35,000 cars that we have financed in the state,Kashmir saw 55 percent of the overall business. The trend is such that on anaverage people don’t retain vehicles for long time and purchase new modelsevery 3-4 years. Rs 4 lakh to Rs 4.50 lakh is the average finance amount percar that we process,” he said.
Gandotra said J&K Bank has seen growth of 40 percent inits car finance business during last one year. “During last 3 months we havefinanced 5,200 cars in the Valley as usually December onwards is a period wherethere is an uptick witnessed in car sales. With an increased consumer demandfor cars, we expect the car finance business to continue growing at 30-40percent even during the next financial year,” said Gandotra. The car businessin Kashmir has witnessed a surge despite 2014 floods and 2016 unrest, whichdampened the growth and business sentiment in Kashmir, he said.
Claims of financial sector gets backing of automobiledealers, who say every month 2000 to 3000 new cars are rolled out by variousdealerships across Kashmir. Besides a big chunk of people purchase their carsfrom outside valley as well. Carshowroom owners and salespersons say people have been buying cars despiteleading car manufacturers increasing car prices.