Mercedes-Benz arm bullish

Mercedes-Benz arm bullish

Mercedes-Benz Leasing (Thailand), the captive finance firm of the luxury carmaker, aims to increase its market share of the German firm's car loans to 55% by year-end.

The leasing firm also aims for loan portfolio growth of 15% to 35 billion baht this year, said managing director Supavut Jiramanusnakorn.

The company has a 50% market share of overall loans to Mercedes-Benz, up from 40% last year.

Its service quality and variety of financial products to meet customer demand will help the company achieve its targets, Mr Supavut said.

The company expects mySTAR, its balloon leasing scheme, to increase to 15% of its loans to retail debtors by year-end.

Under mySTAR, borrowers are allowed to pay lower monthly instalments and a lump sum for the final instalment. Moreover, it has a feature to allow customers to change to a new Mercedes-Benz car.

Currently, mySTAR accounts for 25% of its loan portfolio and 11% of its lending to individual clients.

With its flexible option, mySTAR helps the leasing firm in penetrating new segments and enlarging its customer base, Mr Supavut said.

Monthly instalments for normal loan schemes are up to 40,000 baht a month for buying a Mercedes-Benz car, so borrowers must have a minimum income of around 100,000 a month. However, mySTAR customers only pay 20,000 baht a month, so their minimum income can be 60,000 to 70,000 baht.

Debt servicing of mySTAR customers remains sound. The service, launched in 2013, offers a maximum term loan of five years, longer than any of the company's other loan products.

"Given that all of the company's customers are high earners, we expect to control asset quality at a satisfactory rate," Mr Supavut said, adding that non-performing loans are only 0.5% of outstanding loans.

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