Bangkok--16 Nov--DC Consultants and Marketing Communications
Summit Capital Leasing Co Ltd, a leading motorcycle hire-purchase subsidiary of Tokyo-based Sumitomo Corporation, one of the world's largest trading companies, reports strong performance in the third quarter of 2015 with revenue growth of 30 per cent exceeding its expectations. The loan growth increases 53 per cent from the same period of the previous year, thanks to its aggressive business expansion nationwide. Currently, the company heads south, starting with two provinces Suratthani and Nakhon Si Thammarat. Its CEO is confident that the loan growth will exceed target with an increase of 27.44 per cent to 4.1 billion baht by the end of this year.
Wichit Phayuhanaveechai, Chief Executive Officer, Summit Capital Leasing Co Ltd, said that in the first nine months of this year, the registration of motorcycles has decreased by two per cent, compared to the same period of 2014. This was a result of several negative factors, including the overall economic conditions that are not likely to be improved, falling prices of agricultural products and negative growth of exports--growing at minus 5 per cent. These conditions have affected the labour force while the tourism industry was also hit hard by the unrest in the past as well.
The motorcycle market conditions in Thailand have seen continued slow growth since 2014, with sales decreased by 16.48 per cent from that of 2013. The sales in a period of January to September 2015 decreased by two per cent when compared to that of 2014.
However, even though the Thai economy remains stagnant, the company is able to report better-than-expected results, which is a 30 per cent higher than targeted. This was a result of a 53 per cent increase in the loan growth, when compared to that of the same period of 2014, totaling more than 3 billion baht. The company expects the loan growth will increase by 35 per cent in the last three months of this year, from the total growth it did in the first nine months.
"To date, most of our borrowers are from the central and eastern parts of Thailand. The key factor contributed to our growth is our aggressive business expansion nationwide, including northeastern, central and southern regions. We intend to open a new branch a month in these regions to expand our customer base," Wichit said.
Another supportive factor is a robust, proactive relationship management strategy that the company has implemented to build relationship with the local stores. It focuses on the friendly service, while participating in planning their marketing strategies so that they can run a business smoothly. This has resulted in a 32.85 per cent increase in numbers of partnered motorcycle stores, over the year 2014. The company also gives importance to its sales strategy that emphasizes on quality of the customer over quantity. It has the highly effective risk management system that is accurate and can be evaluated to control the credit approval process, along with the debt collection process, which is operated by the highly experienced staff. Thanks to these, the company's non-performing loan (NPL) stands at 1.18 per cent of the total loan portfolio in the first nine months.
For the remaining three months of 2015, the company sees the need to conduct business with caution and monitor the economic situation closely to achieve minimal impact on the business. Meanwhile, it will also move ahead with plans to open new branches in areas with potential for economic stability. Recently, Summit Capital has taken an offensive market penetration approach in the South for the first time in more than 20 years. Nakhon Si Thammarat is a pilot province where it recently opened a new branch.
The new motorcycle registration in southern Thailand from the beginning of the year to August 2015 stands at 17 per cent of the total new motorcycle registration nationwide. The region has accounted for the third largest, follows the northeastern and the northern regions, whose figure represented 34 per cent and 19 per cent respectively. Suratthani province alone saw the new motorcycle registration reaching 13 per cent or about 19,106 units a year, an average of 2,300 – 2,400 units a month. It is among the forefront of the provinces with the highest rate of new motorcycle registration in the region, second to Songkhla province.
Prior to opening a new permanent branch in Suratthani province since early September, the company has conducted a market survey and found that during the past three months, it has lent about 35 million baht to the customers. This was a result of its relationship building between partnered stores in the south. To date, over 30 per cent of total stores in the area have become its partners. The company chooses to further open the new branch in Nakhon Si Thammarat provinces respectively as the customer's demand and motorcycles hire purchase market in the South remain high.