Krungthai Car Rent & Lease Plc (KCar) expects the second-hand car and car rental markets to slow as loans remain difficult to obtain from financial institutions.
Banks adopted stricter lending criteria for buyers of second-hand cars and companies wanting to lease cars as household debt remains high and people's purchasing power is weak.
"High household debt raises concern among banks over non-performing loans [NPLs] as NPLs are high in the automotive sector," said Pichit Chantarasereekul, managing director of KCar.
In the used car market, people still want to buy internal combustion engine (ICE) cars rather than electric vehicles (EVs) because there are many more petrol stations than EV charging facilities, said Mr Pichit.
"In the ICE category, demand for passenger cars is higher than pickups as banks are not granting as many loans for buyers of used pickups because there is a higher rate of car seizures," he said.
The number of EVs continues to increase in the second-hand market as more are seized from owners unable to make instalment payments, while others want to change EV models, said Mr Pichit.
In the car rental business, both ICE cars and EVs are mostly leased out to large businesses and government agencies because they have high purchasing power.
In the EV segment, the prices of leased vehicles are 20-30% lower than the market prices set by EV manufacturers.
KCar has 9,000 vehicles for rent.
Some 85% of the company's customers are large companies, with 15% in the government sector.
KCar plans to expand its customer base to cover small and medium-sized enterprises this year as many of them want to reduce logistics and maintenance costs during the economic slowdown, he said.
The company expects its revenue to increase by more than 5% this year as cars leased out to state agencies should increase, said Mr Pichit.
KCar plans to set an investment budget of 2 billion baht to buy more cars and improve its services, he said.