Bangkok--22 Jul--DC Consultants and Marketing Communications
Summit Capital Leasing, a leading provider of motorcycle leasing and hire purchase services and a subsidiary of Japan’s Sumitomo Corporation, the global leading trading house, is confident that the growth of the motorcycle financing business will be resumed in the second half of 2014 in the wake of the economic recovery showing signs of returning consumer confidence following the National Council for Peace and Order’s restoration of political stability. The company also announced to fully expand its presence in the North-Eastern region to achieve more market share in the second half of the year.
Wichit Phayuhanaveechai, chief executive officer, Summit Capital Leasing, said that the growth of Thailand’s motorcycle market has continued to decline since mid-2013 until it ticked down to the lowest level in late January due mainly to a combination of economic and political factors. These included the Bt300 minimum wage hike that made entrepreneurs facing rising production costs so they turned to cut down other benefits of worker such as medical welfare and overtime pay rates instead as well as the increasing unemployment rate driven by shutdowns of many industrial factories and the prolonged political tension that dragged down confidence of consumers and investors.
From January to June 2014, the motorcycle market reported the negative growth in total of -20 per cent especially in late January when the figure hit the lowest point at -42 per cent compared to the growth in the corresponding period last year when the political confrontation reached a climax. However, Summit Capital Leasing was not affected much as its most businesses and customer bases are in provincial towns.
Regarding the overall growth for 2014, the market is estimated to decrease by 15 per cent from last year. A total of 1.7 million new registered motorcycles are expected, down from 2013 which saw two million units. Also, 820,000 new motorcycles are likely to be registered in the second half of this year, decreasing by only six per cent. That is very much better than the figure in the corresponding period last year which reported a 17 per cent contraction from 2012.
These optimistic outlook is mainly attributed to the recovering confidence among consumers and investors following the junta’s speedy action in tackling economic issues and urgent problems, particularly on the payments to farmers participating in the rice-pledging scheme which help increase nationwide purchasing power.
In addition, a market research reported that the top 5 best-selling motorcycle brands in the first half of 2014 are Honda and Yamaha as follows: WAVE110i, SCOOPYi, CLICK125i, WAVE125i and FINO (Disc) as these models can suit users’ preferences and their lifestyles in provinces very well.
Considering the proportion of the company’s business growth by region, Summit Capital Leasing has been growing in all service areas in the first half of the year, except the central part--Bangkok and its vicinity, which are the central of the political conflicts. The region that the company saw the highest growth is the West, with a growth of 38%. It is because the company has made a significantly business expansion into this regional market that includes HuaHin of PrachuapKhiri Khan, Ratchaburi, Petchaburi provinces. We expanded our business through building a good relationship with motorcycle dealers in the areas and implemented rigorous risk management in order to effectively control the quality of debt to lend to the new customers.
Regarding the business strategy for the second half of this year, the company plans to expand its operations in provinces in the upcountry. It will open the new branches in Sattaheep district of Chonburi province, including PrachuapKhiri Khan, Saraburi, Suphanburi, Prachinburi and Chantaburi provinces. It will also penetrate into the Northeastern markets to cover more areas as it finds that the region has a high growth potential. The company will focus on building the Summit Capital Leasing brand stronger and make it more popular among the customers through marketing activities and PR channels. Recently, the company has participated in the Bangkok Motorbike Festival 2014 at Central World Plaza.