Kasikorn Leasing (KLeasing), Kasikornbank's automobile lending arm, expects only marginal loan growth this year, reinforcing pessimism that domestic new-car sales will rebound at a slow pace.
The company forecasts its car loan portfolio edging up to 89.9 billion baht this year compared with last year's meagre 0.63% growth rate to 89.7 billion.
The auto lender estimates the industry's overall automobile loans will expand by 1% in 2015, assuming new car sales stand at 900,000 to 950,000 vehicles this year, up from 881,000 last year, managing director Surat Leelataviwat said yesterday.
He said first-quarter domestic car sales were expected to shrink by 2% year-on-year but gradually improve in the second quarter before picking up significantly in the second half.
For the full year, KLeasing targets its new-car loans will rise by 17.6% or 71.8 billion baht this year, with 40 billion from passenger cars, commercial vehicles and big bikes and the rest from car dealers and automobile refinancing loans.
Thailand's car sales have faltered in recent years after effects from the Yingluck Shinawatra government's tax rebate scheme for first-time car buyers wore off.
The populist policy, which pushed up domestic car sales to a record 1.47 million vehicles in 2012, has been blamed for stealing future demand and even creating artificial demand.
Amid the fragile economic recovery and swelling household debt, the company plans to exercise caution in extending loans in order to prevent the level of non-performing loans (NPLs) from rising.
KLeasing hopes to keep its NPLs at no more than 1.5% of outstanding loans this year compared with 1.16% last year.
Competition among automobile lenders is expected to remain tough despite the estimated minimal growth in new car sales this year.
Captive finance companies are expected to hold promotional campaigns to boost their parent's car sales.