Leasing Market War
KLeasing expand Digital Platform, service and customer networks. Meanwhile, focus will also be on expansion of its online service channels.KLeasing will work with its business partners and car dealers nationwide with the aim of extending more than 110 billion Baht in new loan.
Mr. Sasawat Virapriya, KLeasing Executive Chairman, said that the domestic car market, KResearch expects between 980,000-1,010,000 units of vehicles will be sold this year, shrinking by 2-5 percent when compared to the figure in 2018. The sales volume is adjusted toward normalcy after a rapid surge in the previous year. Eco-car is poised to enjoy bright prospects in the passenger car category as automakers have planned to roll out new models of eco-hybrid cars and mild-hybrid vehicles, while the government is set to provide tax incentives to make prices of environmentally-friendly vehicles more competitive. Hence, customers are likely to easily embrace innovative technology of electric vehicles. Moreover, other electric vehicles such as plug-in hybrids and battery electric vehicles should grow further after a number of car makers have decided to produce such cars in Thailand for commercial purposes. The upcoming general election and an expanding public investment should also contribute to a growing pick-up market in Thailand.
On the market outlook for auto hire purchase, the overall growth of auto hire purchase is expected to decelerate to 4.5-6.5 percent in 2019 due mainly to new car sales; after the market expanded over 13 percent last year to exceed 1.06 trillion Baht which is the first double-digit growth in six years. The buoyant turnover last year was a result of new car sales and the slowdown of car-loan repayments after the end of the first-car scheme’s lock-in period.
"On K-Auto Finance (Refinance), the market this year is set to continue expanding thanks to the newly-announced regulation to control car registration loan, effective January 31, 2019. Such announcement will intensify the competition among commercial banks, which are the major auto hire purchase providers. In addition, as there are loan demands from SME entrepreneurs and individual customers, interest rate ceiling and clearly-established practices to protect the borrowers’ right have increased options for customers to access to loans." said Mr. Sasawat
“KLeasing will continue to penetrate the auto financing market in 2019 by focusing on digital innovations for all types of auto loans and using KBank’s strengths in service network and customer base to expand our online and offline businesses. Such attempts are aimed at offering auto loan products that meet the lifestyle needs of our customers, who use digital technologies in their daily life. KLeasing will also improve various platforms to offer more convenience for our clients and provide auto financing products and services to meet their needs by taking into account their ability in making installment payments, our credit approval and after-sales service, especially for K-Auto Finance (Refinance), which targets car owners who want working capital or liquidity. KLeasing has introduced a new product under K-Auto Finance (Refinance) in 2019, i.e. car registration loan, so that we can cover all the needs of our customers. In addition, we will strive to develop Data Analytics technology to undertake an in-depth analysis on the customers’ needs so as to allow us to offer auto loans to the customers wishing to buy new cars or those wanting to refinance their vehicles, including our corporate clients, without the need to submit a loan application. Regarding cooperation with our business partners, KLeasing through collaboration with KBank will join forces with our large business partners in introducing marketing campaigns throughout 2019, targeting largely corporate and individual customers. KLeasing aims to extend over 110 billion Baht in auto loans in 2019.”
KLeasing’s operating results in 2018 showed total loans of THB105.64 billion, rising 24.39 percent from 2017, consisting of auto hire purchase, leasing and car registration loans of THB43.51 billion, and floorplan loans of THB62.13 billion, rising 8.72 percent YoY and 38.36 percent YoY, respectively. With outstanding loans growing 11.36 percent YoY to THB108.08 billion and NPLs of 1.32 percent, KLeasing’s profit surged 29.78 percent YoY to THB1.40 billion. The brighter performance was in line with the domestic car market in 2018 which recorded the highest sales in five years, totaling 1,041,739 units.
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