Mumbai, Nov 12 (UNI) BNP Paribas' has launched its corporate automotor leasing entity Arval, that will offer across the board range of cars to corporate houses in India.
Speaking at the launch here today, Arval (India) Managing Director Liam Donnelly said the company believed that this was the right time to enter the market, as the estimated Rs 1,800 crore Indian market has only four to five potential competitors and market penetration of less than five per cent, providing interesting growth potential.
''Operational leasing is an efficient way for corporates to use cash especially in times of credit crunch. The risk of vehicle during the lease period, which will be three to five years, lies on Arval,'' he said.
Arval has invested Rs 27.5 crore through parent BNP Paribas on working capital and further Rs 450 crore will be invested in car fleet through BNP Paribas and local banks till 2010-11.
''The company will focus on existing BNP Paribas clients, top sensex companies and International business offices (IBOs) entering the Indian market. We will not depend on government and PSU sectors as they are into short term leasing agreements. In our current client list of 60 companies, we only have three to five government agencies,'' Mr Donnelly said.
On growth projections, Mr Donnelly said that the company has plans to increase its fleet to more than 6,700 vehicles by 2011 and 9,000 by 2012 and capture 15 per cent of the market. The turnover by 2012 is expected to cross Rs 270 crore and value of purchased vehicles at more than Rs 630 crore.
''We expect a growth of over 10 per cent in 2008 itself. Compared to the zero per cent growth in Europe, India's projected seven per cent growth is very attractive,'' he said.
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