Tata Motors sets subsidiary to finance vehicles

New Delhi, Aug 25: Tata Motors Ltd today said it has set up a new subsidiary for its vehicle financing operations.

The new entity, TML Financial Services Ltd (TMLFSL), a wholly-owned subsidiary of the company will function as a NBFC (Non Banking Finance Company), for which it has received approval from the Reserve Bank of India.

TMLFSL will support and enhance the vehicle financing activities of Tata Motorfinance, a company statement said.

The overall vehicle financing done by the company's auto financing arm during the last fiscal was about Rs 5,500 crore, a 60 per cent increase over Rs 3,400 crore a year ago.

In 2005-06, Tata Motorfinance accounted for 23.8 per cent of the company's domestic sales. A total of about 113,000 contracts were booked, including refinance and Construction Equipment (CEQ), while 96,247 new vehicles were financed, a 43 per cent increase compared to 67,356 vehicles in 2004-05.

Company's refinance business grew by 110 per cent, while CEQ business grew by 165 per cent in the last fiscal.

UNI