Auto leasing companies have shifted their loan focus to vehicles using new technology, particularly hybrids, to offset slowing eco-car sales.
Pairote Cheunkrut, managing director of Ayudhya Capital Auto Lease Plc (Krungsri Auto), the auto leasing subsidiary of Bank of Ayudhya, said the company will diversify into hybrids and family cars to offset the slowdown in eco-car loans.
The firm has not set a specific growth target for the hybrid segment this year, but it will be in line with market demand in the overall auto industry.
Krungsri Auto, the second-biggest lender in terms of outstanding car loans, expects to maintain market share for new car loans at the existing level of 14%, assuming overall 2013 new car sales of 1.2 million units in Thailand after last year's 1.4 million.
Eco-cars gained popularity over the past two years, with demand stoked by the government's first-time car buyer scheme.
The tax rebate of up to 100,000 baht for first-time buyers of cars not exceeding 1,500cc expired on Dec 31, but car deliveries can still take place this year.
Mr Pairote said Krungsri Auto has offered loans for 50,000 cars under the scheme, with an additional 20,000 pending approval during the first half of the year.
The Excise Department said rebate applications for 1.3 million cars have been filed by buyers.
Krungsri Auto expects to offer 120 billion baht in loans for new cars by year-end, down from 140 billion last year.
Meanwhile, Pinyawat Chantrakarntanon, the managing director of KTB Leasing, a subsidiary of Krungthai Bank, said demand for eco-cars has slowed since the end of the first-car scheme.
Demand for eco-car loans is expected at 30-40% of overall new car sales this year, down from 50% last year.
"Demand for both eco-cars and auto loans will come back at the beginning of next year with the launch of new eco-car models and the return of consumers' real demand," said Mr Pinyawat, adding that the company's auto loan strategy will correspond with the new market environment.
Kasikorn Leasing, the auto leasing firm under Kasikornbank, said 2012 was an exceptional year for the country's auto sector including eco-cars and auto loans.
Despite the probable slowdown, demand for eco-cars in 2013 is expected to remain stronger than when the small and fuel-efficient cars were first launched in Thailand in 2011.
Demand for cars with bigger engines than 1,500cc should return with the lapse of the first-time car buyer scheme.
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter