At the end of 2005 Alfa-Bank established an Auto Finance division to introduce its car loan products to the market. In its first year, this business unit issued over 15 000 auto loans for a total amount of US$ 194 million. Auto finance offices were opened in 80 Russian cities in more than 1000 car dealerships. According to RosBusinessConsulting, Alfa-Bank gained around 2% market share in auto finance by the end of 2006.
Along with the creation of auto loan products like classic car loans, express car loans and zero down payment loans, the Bank started testing and streamlining its customer service systems in this area. Thanks to efficient technology in credit surveillance, it now takes no more than 60 minutes to finalize decisions regarding car loan applications. Consequently the client is able to receive a car from the car dealer on the same day a loan application is submitted at the credit consultant in the car dealer’s office. This independent system of working with car dealers and insurance companies allows for the sale of loans through business partners. It saves Alfa-Bank the costs of maintaining its own sales outlets with the associated costs of staff, equipment and overheads. It also means that all paperwork is prepared in the car dealer office, a significant convenience for prospective clients.
A special deal, which includes a range of additional services and loan support with the purchase of a vehicle, is available to VIP clients. Due to the close cooperation between Auto Financing Block, car dealers and insurance companies, Alfa-Bank can now apply an individual approach to its clients. The cap on VIP deals has been raised to US$ 200 000 and loans are offered for up to 6 years.
Alfa-Bank’s auto finance portfolio includes 40 car brands of which 30% are Russian cars and 70% are foreign.
In 2006, Alfa-Bank put in place a GM Finance Private Label Agreement to promote cooperation in auto loans with car manufacturer General Motors CIS. Cooperation with large manufacturers has enabled the Bank to develop and implement special auto loan offers with low interest rates on car brands like Opel, Chevrolet, Saab, Cadillac, Hummer, Fiat, Ssang Yong, UAZ Patriot, and HONDA. These offers are valid anywhere in Russia through the dealer networks of our business partners which offer Alfa-Bank as the bank of primary choice.
In 2007, Alfa-Bank plans to further accelerate its Auto Finance growth rates.
