Lenders to refocus on larger vehicles
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Providers of auto loans will focus more on vehicles with engine capacities above 1,500cc in light of expected slower growth in the eco-car segment following the end of the first-car scheme. Sales of eco-cars were exceptionally strong during the scheme, wh
Eco-car sales this year will enter a recessionary phase unless auto-makers launch new models to stimulate the market, said Isara Wongrung, chairman of the Thai Hire Purchase Association.
He said the rising trend for hybrid petrol-electric vehicles in Thailand would continue. However, while these models are popular overseas, it could take time for domestic sales to rise significantly because hybrids were still relatively new to Thailand.
Ayudhya Capital Auto Lease, more commonly known as Krungsri Auto, will strongly focus on hybrid and family vehicles to diversify away from the now less attractive eco-car segment, said managing director Pairote Cheunkrut.
Overall vehicle demand will return to the situation before the first-buyer programme, because the massive growth experienced over the past two years in the eco-car segment will inevitably slow down, he said. Half of the 1.4 million vehicles sold in the Kingdom last year were eco-cars.
Consumers realise that eco-cars are too small to handle the needs of a family, so larger vehicles will be in demand again after the expiry of the scheme, he added.
Hybrids hot
Under the first-car scheme, Krungsri Auto expects to grant additional loans for 20,000 pent-up vehicles during the first half of this year. It granted loans for the purchase of 50,000 vehicles over the course of last year.
“We expect hybrid vehicles will become a hot model because of the energy savings. We will try to drive lending from hybrid vehicles as well as family vehicles in line with demand,” Pairote said.
Krungsri Auto this year expects to achieve overall new lending of Bt120 billion. A total of Bt140 billion was extended last year thanks to positive support for the auto sector under the first-car programme.
Krungsri Auto is taking part in the 34th Bangkok International Motor Show, now under way, at which it hopes to provide loans totalling Bt500 million.
Meanwhile, KTB Leasing managing director Pinyawat Chantrakarntanon said the company estimated that domestic sales of eco-cars this year would fall to 30-40 per cent of overall auto sales of between 1 million and 1.2 million units, from 50 per cent of 1.4 million units last year.
Dealers are facing an overstock situation for eco-cars after the ending of the government’s scheme, which means that sales in the segment this year will not overheat as before. KTB Leasing will therefore work with dealers to set special campaigns to sustain the eco-car segment, he said.
Demand for vehicles with an engine size of more than 1,500cc will return this year, he said, adding that the company and dealers would jointly set strategies in terms of segmentation and areas to cash in on given the bright outlook for such vehicles.
Demand for high-technology vehicles such as hybrids is also expected to rise, he said.
Akaranant Thitasirivit, managing director of Kasikorn Leasing, said good sales of 1,500cc-plus vehicles would resume after the end of the first-car scheme, and leasing firms would react accordingly.
