The Hindu : Business : ICICI Bank, Sixt form alliance for car leasing

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Friday, Oct 27, 2006
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ICICI Bank, Sixt form alliance for car leasing

Special Correspondent

Sixt will take up operational responsibilities

Eyes a revenue of Rs. 300 cr. in a year ICICI Bank will handle the financing

PHOTO: SHANKER CHAKRAVARTY

FUELLING AUTO MARKET: (from left): Sunjay J. Kapur, Vice-Chairman and Managing Director, Sixt India, Sachin Khandelwal, General Manager and Head-Vehicle Finance, ICICI Bank, Regine Sixt, President, Sixt Lease Co., and Surinder Kapur, CMD, Sona Mobility Services, at a press conference in New Delhi on Thursday.

NEW DELHI: ICICI Bank and the car leasing service provider, Sixt India, on Thursday announced their strategic alliance to provide a complete vehicle leasing and fleet management solution to corporates, eyeing a revenue of Rs. 300 crore in a year time.

While ICICI Bank, as part of the alliance, will handle the financing aspect, Sixt India will take up the operational and client relation responsibilities.

"We expect a revenue of Rs. 200 crore in car leasing and Rs. 100 crore in renting business in a year,'' Sixt India Vice Chairman and Managing Director Sunjay J. Kapur said while formally announcing the alliance at a media meet here.

Launched in January as the master franchisee for the Germany-based Sixt AG, one of Europe's leading rent-a-car, leasing and fleet management companies, Sixt India (a Sona group company) has now a fleet of about 250 cars and it is aiming to increase the fleet to 3,000 by 2007 and 35,000 in the next five years.

The alliance will provide residual value based leasing, maintenance, repair, insurance management, accident management, fuel management, upgrade options and easy walkout options in the case of employee severance for corporate clients.

100 per cent finance

Spelling out the bank's role, ICICI Bank vehicle finance head Sachin Khandelwal said, "We will give 100 per cent finance to Sixt to acquire cars, while Sixt will give the car on lease to a client at 60-80 per cent of the price of the car for a particular period (three to four years) and get the car back after the term.''

For example, if the price of a car is Rs. 100 and the residual value is Rs. 30 after three years of use, then Sixt will give the car on lease for Rs. 70 and get back the car or the client can keep the car by paying Rs. 30 after the term, Mr. Sachin Khandelwal elaborated.

Mr. Kapur said, "We hope, we are able to provide a vehicle leasing solution that is not just cost effective for the companies but will also raise customer expectations. We see this product create value for every company that is cost conscious, and is, at the same time, aspiring to offer better packages to its employees.''

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