Leasing companies unlikely to launch zero-interest drive
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Upbeat on sales in 2nd half; cites Motor Expo
Leasing firms believe the domestic vehicle market will get back to normal seasonal demand by the end of the third quarter, and will be driven by the Motor Expo towards the end of the year.
However, they are unlikely to introduce zero interest-rate campaigns to promote sales, due to their narrow margins.
Anuchart Deeprasert, a senior director of Thanachart Bank and chairman of the Thai Hire-Purchase Association, yesterday said domestic auto sales had grown only slightly last month from the April level, and that the general outlook for the first half of the year was not as promising as that for the second half, which is the peak season for car sales.
That said, the overall picture for the year is that domestic sales should reach the target of 1.2 million units, as sales in the first six months should still come in at 600,000 units, thanks in no small part to final deliveries under the first-car buyer scheme.
While auto dealers have conducted campaigns during the first half in order to maintain sales growth, leasing companies will launch their own campaigns in the final quarter, including during the Motor Expo in November, he added.
There is little chance of seeing zero interest rates from leasing companies, as their rates are already at a low level, squeezing their margins. Auto leasing firms are expected to accept lower down payments instead, Anuchart said.
However, should any of the companies opt for zero-interest promotions, auto dealers would support the programmes because leasing firms’ low margins would not be able to carry the burden alone.
Oranuch Apisaksirikul, chief executive officer of Tisco Financial Group, said most campaigns currently available were provided by auto producers in tandem with dealers, as the latter’s margins were too low, with firms having slashed their rates in light of the Bank of Thailand’s policy interest-rate cut last month.
She said year-on-year growth in car sales during the first half would likely slow due to seasonal factors such as the long holidays and the rainy season.
Sales will pick up from the end of the third quarter, with the Motor Expo bring the key driver, she added.
Tisco Bank believes it can still achieve lending growth at the targeted level of 15 per cent this year, said the CEO.
Meanwhile, auto-makers have reported domestic sales of 111,848 units in May, a drop of 3.5 per cent from the previous month’s level.
The monthly fall was the first in 17 months, as most consumers benefiting from the first-car buyer scheme had already received delivery of their vehicles by that time.
Thailand’s auto market in the first five months of the year saw sales of 634,777 units, for a year-on-year increase of 31.4 per cent, said Wuttikorn Suriyachantananon, Toyota Motor Thailand’s senior vice president.
With sales so far this month having slowed due to all customers under the first-car scheme having received their vehicles, the auto market is now returning to its normal cycle, he added.
