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 figures and financial institutions data has revealed. As per official figures, out of the total 80,000 automobiles that were registered with regional transport office Kashmir in 2018, which also includes two-wheelers, 30,000 are private cars.
Regional transport officer (RTO), Kashmir, EkramullahTak said 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 50 percent growth. “Easy finance coupled with new launches and a four-wheeler becoming a necessity has propelled the car growth in Kashmir. While cars have been the most hot selling category of automobiles, 2-wheelers especially scooties have also seen a steady growth,” said Tak.
Even as Tak says that various government incentives for bus owners will help growth of public transport in days to come, a J&K Bank survey done earlier this year on vehicles in the Valley says reason for popularity of cars in Kashmir is poor public transport. Even as per the data available with the national portal Parivahan, the sales of buses are on continuous decline in the state.
Interestingly, industry insiders say that southern Kashmir districts which are divided into two business zones by car finance companies, despite uncertain situation, have been witnessing brisk car sales in both the zones which includes Anantnag-Kulgam and Shopian-Pulwama districts. While Srinagar and Budgam as per car finance business are stagnant markets, north Kashmir districts are emerging markets.
Amongst the all, the main contributing factor in spurt of car sales in Kashmir is the easy finances offered by financial institutions. In aRs 1000-crore car finance market in the valley, J&K Bank which claims to hold 80 percent market share in this business says it has financed almost 20,000 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 business during 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 an average people don’t retain vehicles for long time and purchase new models every 3-4 years. Rs 4 lakh to Rs 4.50 lakh is the average finance amount per car that we process,” he said.
Gandotra said J&K Bank has seen growth of 40 percent in its car finance business during last one year. “During last 3 months we have financed 5,200 cars in the Valley as usually December onwards is a period where there is an uptick witnessed in car sales. With an increased consumer demand for cars, we expect the car finance business to continue growing at 30-40 percent even during the next financial year,” said Gandotra. The car business in Kashmir has witnessed a surge despite 2014 floods and 2016 unrest, which dampened the growth and business sentiment in Kashmir, he said.
Claims of financial sector gets backing of automobile dealers, who say every month 2000 to 3000 new cars are rolled out by various dealerships across Kashmir. Besides a big chunk of people purchase their cars from outside valley as well. Car showroom owners and salespersons say people have been buying cars despite leading car manufacturers increasing car prices.