Bangkok--24 May--KASIKORNBANK
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 percent YoY. KLeasing is forging ahead with full-year loans to reach the targeted 77 billion Baht.
Ms. Sarunya Leelarasamee, KLeasing Management Director, said the company is 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 77 billion Baht. 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 loan disbursed within July 31, 2017, are entitled to a 1,000 Baht Tesco Lotus gift voucher and personal accident coverage of up to 1.5 million Baht. Applications are welcome at any KBank branch nationwide or via the KLeasing on Mobile application.
According to KResearch data, total auto sales for 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 percent over-year, following 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 farm price improvements. In addition, cars bought under the first-time car buyer scheme are now available for auction. Therefore, total domestic auto sales in 2017 will likely reach at least 810,000 units, or growth of more than 5 percent YoY.
Car loans at domestically-registered commercial banks in Thailand during 1Q17 recorded higher growth in line with improved auto sales, especially after the end of the five-year mandatory car holding under the first-time car buyer scheme. Moreover, the pre-owned car market has gained its recovery pace due to increased supply expected to enter the market. Meanwhile, demand for floor plan 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 1Q17 stood at 893,350 million Baht, rising 2.8 percent, compared to growth of 1.0 and 1.3 percent in 2015 and 2016, respectively. 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 percent, up from the one-percent average growth over the past couple of years.
The auto refinance market in Thailand is quite large and has enjoyed rapid growth. Most customers seek loan 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 loan in the banking system totaled less than 150 billion Baht. In 2017, car refinancing loan is expected to witness double-digit growth due to increases in both demand and supply.