To revive auto sales, two-wheeler companies including Bajaj Auto and TVS Motor have come forth to offer zero-interest loans in some of the cities. This has been worked out amid drooping sales and piling up of inventory with these auto makers.

HeroMoto Corp has reduced its loan rate to 7% from the current 10% and such soft loans are being extended through the company's finance arms including TVS Credit, Hero FinCorp and Bajaj Auto Finance.

And as per an analyst survey, the cost of these soft loans will be borne by OEMs and it has been reported that 2-wheeler vehicle financing has increased from 30-35% to 40-50% currently in just 18 months time.

This is for the first time in many years that subsidized sales together with cash discounts and other freebies are being extended to woo customers.

"Availability of finance has become critical in urban centres, because of the NBFC liquidity issue and the footprint of finance in the rural market is another challenge. We are trying to tackle both and make sure customers get to buy", said Sanjay Bhan, Head of sales, Hero MotoCorp.

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