Hire-purchase lender Summit Capital upbeat on bike sales in last quarter
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Summit Capital, a major motorcycle hire-purchase lender, sees the motorbike market revving up this quarter as the rainy season passes and the economic situation accelerates.
Wichit Phayuhanaveechai, chief executive officer of the subsidiary of Japan’s Sumitomo Corporation, said yesterday that the motorcycle market had continued to slip mainly on a mix of factors, including the political and economic instability in the country – which put consumers off from spending – and the industry’s low season.
From January-September, 1.32 million new motorcycles were registered, down 16.7 per cent from 1.59 million units in the first nine months of last year.
Although motorcycle sales had experienced double-digit drops since the beginning of the year, it could gradually see a lift, from a contraction of 29 per cent to shrinkage of 8 per cent in September.
Summit Capital posted growth of 3 per cent in September and expects to see an uptrend after the government declared stimulus plans to bolster the struggling economy.
In particular, the payments to farmers participating in the rice-pledging scheme and the current stimulus to farmers have helped invigorate the grassroots economy.
Even though the political uncertainty dented the growth in motorcycle sales volume, the company reported a 13-per-cent rise in profit to Bt145 million in the first nine months. This was better than it had expected.
The recovering economy helps more of the company’s customers pay instalments on time. Customers defaulting on their first six instalments have declined from 12 per cent early in the year to 9 per cent in September.
The fourth quarter is the high season for motorcycle sales thanks to the end of the rainy season and the start of the new school semester.
The pick-up in the economic situation and the government’s subsidy pay-outs of Bt1,000 per rai to rice farmers are also expected to help boost consumer spending, particularly among the 18 million-20 million people that earn monthly incomes of Bt6,000-Bt15,000.
To achieve its ambitious plan to become the industry leader within five years, the company aims to double its motorcycle hire-purchase agreements from 5,000 per month to 10,000 per month by next year.
