Slowdown in auto loans seen

Kasikorn Leasing Co, a business unit of Kasikornbank, might need to review its auto-loan target in line with the sales of Honda cars next year because Honda plants have been hit by the floods. KLeasing is the second-biggest provider of loans for purchases of Honda cars after Honda Leasing,
The lender expects the delivery of Honda and other brands to be delayed by six to 12 months, said Isara Wongrung, managing director of KLeasing.
KLeasing has already witnessed a 25-per-cent drop in auto loans this month from September.
The company reported new loans of Bt44.13 billion in the first nine months of the year, higher than its forecast of Bt43.3 billion for the whole year.
“We are not worrying about our performance this year because our result was higher than the target. We are more concerned that the suspension of auto production will affect auto sales and loans next year,” he said.
Isara said the company might ask Honda to increase KLeasing’s share of loans to Honda customers from the current 10 per cent. Moreover, the company might approach other brands about providing loans for their buyers.
He said KLeasing had maintained its profit target for this year at more than Bt400 million.
KLeasing yesterday announced net profit of Bt342.54 million in the first nine months, up by 10.96 per cent year on year.
The overall auto-loan market this year is expected to be Bt600 billion, down from the earlier forecast of Bt650 billion, because of the effect of the flood crisis in the current final quarter.
Pairote Cheunkrut, managing director of Ayudhya Capital Auto Lease, or Krungsri Auto, said its new loans in October had dropped by 10 per cent from last month because of the suspension of both demand and supply.
He agreed that the delivery of new vehicles would be delayed by at least six months, as inventory is sufficient for only two months, October and November. As a result, the rate of new-auto loans next year might see a slowdown.
He added that Krungsri’s flat rate for new-auto loans would be maintained at 2.65 per cent until the end of this year and might be reduced next year after the central bank on Wednesday decided to maintain its policy rate at 3.5 per cent.
Isara of KLeasing believes the flat rate will either be maintained or lowered because the economy is expected to slowed by the flooding.
Anuchart Deeprasert, senior executive vice president of Thanachart Bank, said the interest rate was not a key factor of the hire-purchase business because both demand and supply had dropped.