KLeasing confident of target as auto market recovers
Amid consistent recovery of the auto market, sales turnover has reached a four-year peak, and this year’s sales growth is expected to be more than 5 per cent year on year. In response, Kasikorn Leasing says it is confident of reaching its full-year loan target of Bt77 billion.
Sarunya Leelarasamee, KLeasing management director, said the company was implementing proactive strategies in all customer segments, especially in key provinces. Focus remains on the K-Auto Finance (Refinance) product given its potential of continued growth and good debt quality.
This year, KLeasing has set a target of combined loans at Bt77 billion.
Recently, the “K-Auto Finance (Refinance) – Shop Thousands – Insure for Millions” campaign was launched for customers with lien-free vehicles in need of working capital. Applications submitted from May 22 to June 30, with loans disbursed by July 31, are entitled to a Bt1,000 Tesco Lotus gift voucher and personal accident coverage of up to Bt1.5 million.
Applications are accepted at any Kasikornbank branch nationwide or via the KLeasing mobile application.
According to Kasikorn Research data, total auto sales in the first quarter of 2017 stood at 210,490 units, on the back of consistent recovery of the auto market. April sales were reported at 63,200 units, up 15.1 per cent year on year, after the release of various new passenger car models since late January.
Other positive factors included better performance of the Thai economy, particularly in the tourism sector and crop-price improvements.
In addition, cars bought under the previous elected government’s first-time-car-buyer scheme are now available for resale. Therefore, total domestic auto sales in 2017 will likely reach at least 810,000 units, or growth of more than 5 per cent year on year.
Car loans at domestically registered commercial banks in Thailand during the first quarter of this year recorded higher growth in line with improved auto sales, especially after the end of the five-year mandatory car holding under the first-car tax-break scheme.
Moreover, the pre-owned-car market has gained recovery pace due to increased supply expected to enter the market.
Meanwhile, demand for financing plans from used-car dealers has been on the rise after the existing high-cost inventories have been released amid the relatively stable median price of pre-owned vehicles this year.
Outstanding auto loans during the first quarter stood at Bt893.35 billion, rising 2.8 per cent, compared with growth of 1.0 per cent in 2015 and 1.3 per cent last year.
Over the rest of this year, auto financing is expected to fare slightly better thanks largely to greater-than-expected new-car sales, though repayment of loans reaching maturity will remain active. As a result, net car loans may see growth of 3-4 per cent, up from the 1-per-cent average growth over the past couple of years.
The auto refinance market in Thailand is quite large and has enjoyed rapid growth. Most of these customers seek loans to boost their liquidity or for investment. Most vehicles in the refinance market are pickups and other commercial vehicles.
As of the end of 2016, car refinancing loans in the banking system totalled less than Bt150 billion. In 2017, car refinancing is expected to witness double-digit growth due to increases in both demand and supply.
