To capitalize on the 38th Thailand International Motor Expo 2021 or Motor Expo 2021, KASIKORN Leasing Co., Ltd. (KLeasing) has launched a campaign, "Worry-Free - 90-Day Free Drive - Interest-free Down Payment" to offer triple privileges to customers who want to buy a new car during the promotion period. KLeasing announced its 10-month performance, which showed 29-percent growth in new car loans and profit growth of 60 percent despite an overall contraction in the car market. Meanwhile, KLeasing plans to launch new promotional campaigns by leveraging its strength and focusing on exclusive privileges offered to KBank customers, meeting their needs across all types of auto loans.
Mr. Tirachart Chiracharasporn, KLeasing Managing Director, said that KLeasing has introduced a promotional campaign to coincide with the 38th Thailand International Motor Expo 2021, or Motor Expo 2021. Under the "Worry-Free - 90-Day Free Drive - Interest-free Down Payment" concept, applicants for a new car loan during December 1-31, 2021, with an approved loan and signed contract by February 28, 2022, are entitled to triple privileges: Privilege 1: Worry-Free wherein they receive a car air purifier, valued at 3,190 Baht; Privilege 2: Grace period allowed - 90-day free drive; and Privilege 3: Interest-free Down Payment via K-Credit Card for up to six months. To be eligible for these privileges, applicants may apply for a loan at the Motor Expo 2021 or with car dealers nationwide, or apply online via www.kasikornleasing.com.
During the first 10 months of 2021 (Jan.-Oct. 2021), KLeasing's total auto loans topped 74.30 billion Baht, with Auto Loan (New Car) rising 29 percent over-year. The Company has focused more on grassroots customers via its "Car to Cash" loan, comprising car registration transferred (hire-purchase) and car registration loan. Therefore, its Car to Cash loan grew 24 percent. Moreover, it has offered Auto Loan (Used Car) to pre-owned car buyers, a sector generally regarded as higher-risk. Given the Company's efficient loan quality management, its non-performing loans (NPLs) stood at 1.25 percent, down 0.06 percent from the same period of last year. Overall, KLeasing recorded a profit of 1.39 billion Baht, rising 59.91 percent YoY thanks to its efficient cost management.
Meanwhile, the Thai car market reported a sharp contraction of 26.5 percent during 3Q21. KResearch expects that 2021 domestic car sales will reach roughly 725,000-740,000 units, a shrinkage of 6.3-8.5 percent YoY in line with the sluggish growth in auto loans. As of 3Q21, outstanding auto loan among domestic-registered commercial banks hit a seven-quarter low of 1.160 trillion Baht, a contraction of 1.66 percent as compared to that reported at the end of 2020, and a shrinkage of 1.55 percent YoY. However, due to the improvements in the domestic COVID-19 situation, such as higher inoculation rates, relaxation of lockdown restrictions for many businesses in numerous locations, and the government's decision to reopen the country to international tourists, it is expected that 2021 outstanding auto loan may contract at a slow pace of 1.5 - 0.5 percent. Auto loan is projected to resume growth of approximately 2.0-4.5 percent in line with KResearch's estimate that new car sales will begin to pick up with the Thai economic recovery during 2022 when domestic car sales will likely reach 750,000-800,000 units, an increase of 3-10 percent YoY despite several risks, including the fact that consumers will still be cautious about their spending and financial institutions will tighten their loan approval criteria.
Mr. Tirachart added that KLeasing will continue to press ahead with proactive marketing campaigns, focusing on segments that have growth potential. The company will leverage on its strengths, namely an extensive service network and KBank's solid customer base to offer auto loan products that meet the lifestyle needs of all customer segments. Additionally, KLeasing will continue to use innovations to enhance the customer service experience both before and after sales services. Data analytics will also be employed to get to know customers better while also tailoring auto loan products to match their needs at the right time. Additional new products will be launched to tap new customer segments, such as auto loans for pre-owned vehicles, and hassle-free auto loans for retail customers with no documents required so that they can gain easier access to credit.
Regarding collaboration with business partners, KLeasing will continue to focus on a diverse range of partnership, including leading carmakers, new and pre-owned car dealers, plus owners of marketplace channels, to undertake joint marketing efforts. New campaigns will gradually be introduced throughout 2022, including products for corporate or retail customers via cooperation with KBank, which has a solid base of potential customers.