Mercedes-Benz Leasing has high hopes for mySTAR
MERCEDES-BENZ Leasing (Thailand) believes its innovative investment management programme called mySTAR could soon become the first choice of buyers.
“What we are seeing is an increase of wealthy [young] consumers and they are ready to change to new Mercedes-Benz models because a new model can represent their lifestyle,” Supavut Jiramanusnakorn, managing director of the local unit, said yesterday.
“The trend can encourage the growth of the mySTAR financial programme,” he said.
The company introduced mySTAR in 2013 by allowing borrowers to design their own option – either return their current car to the company and change to a new model, pay off the remaining balance and own the vehicle, or extend the financing terms by up to four years.
In the first year of the programme, about 3 per cent of new contracts used it and last year, the proportion went to 20 per cent. The company hopes to see 25 per cent this year.
Globally, the ratio is 80 per cent. The local unit aims to go as high as that eventually.
In the past, Mercedes-Benz drivers preferred lease-to-own.
MySTAR in the eyes of younger consumers is a financial tool that can help them manage cash flow and investment in the future.
Most buyers are executives with a monthly income of more than Bt100,000 and entrepreneurs, so non-performing loans are not a problem.
About 35-40 per cent of sales are to business owners paying cash.
MBLT finances 44 per cent of Benzes in Thailand. The rest is loans from banks catering to wealthy customers.
However, banks have tightened up credit to car buyers by requesting a bigger down payment. That makes customers come to MBLT because it is a captive lessor, which needs to support sales of Mercedes-Benz.
“We will allow small down payments and zero down payments based on the payment background from the National Credit Bureau,” Supavut said.
“We have to know these customers well before giving a loan. We found that they are upgrading from Japanese vehicles priced at Bt1 million to Benzes.”
Although economic circumstances are hard to predict, the company believes that as things are now, the high-end vehicle segment can grow while overall auto sales will not expand.
Mercedes-Benz this year targets sales growth of 10 per cent.
MBLT targets new loans of between Bt13 billion and Bt14 billion, up from bookings of Bt12 billion last year, and outstanding loans of Bt35 billion, up from Bt30.50 billion.
Mercedes-Benz will introduce super-trucks in Thailand in three years to ride the logistics wave in Asean. That will also support lending.
