K Leasing: Automobile leasing market expected to shrink 12% this year

[webfact]

K Leasing: Automobile leasing market expected to shrink 12% this year

BANGKOK, 6 August 2015 (NNT) – The market for automobile leasing is expected to contract by 12-13 percent this year, according to Kasikorn Leasing Co., Ltd. (KLeasing).

Surat Leelataviwat, managing director of Kasikorn Leasing, a wholly-owned subsidiary of Kasikorn Bank Plc., disclosed on Wednesday that he expected a total of 780,000 new cars to be sold in 2015.

This figure would represent a shortfall of 120,000 vehicles when compared with the 2014's sales. Kasikorn Leasing is therefore shifting its emphasis toward dealers of automobiles for business use and the truck market.

Special emphasis is being placed on the market for trucks used to transport cargo between countries in the Mekong region. Mr. Surat indicated that the aim was to achieve a whole-year lending growth of 1.5%.

He added that the impending adjustment of the excise rate on cars with a larger engine is expected to result in a rise in sales of the said cars during the final three months of the year, whereas would-be buyers of small cars or eco-cars are expected to make their purchase at the beginning of next year.


-- NNT 2015-08-06

[JoePai]

Good news - too many cars on the roads already which people cannot afford.

[laocowboy2]

So even more job losses at the auto factories and parts manufacturers - and perhaps more leaving for Vietnam.

[assayer]

He added that the impending adjustment of the excise rate on cars with a larger engine is expected to result in a rise in sales of the said cars during the final three months of the year.

Does anyone know what this is about? I hadn't heard and am interested.

[quandow]

How much worse does the Thai economy have to get before the obvious change is made?

[Down the rabbit hole]

And another ringing endorsement for the generals...

[Pinot]

Good news - too many cars on the roads already which people cannot afford.

Or drive.

[green job]

Good news - too many cars on the roads already which people cannot afford.

Please tell me how you know that.

[englishoak]

Good news - too many cars on the roads already which people cannot afford.

Please tell me how you know that.

Widely reported household debt.......... 94% of farmers in debt according to just last week, yathink some of that might just be for trucks or business vehicles they cant afford ?

[green job]

Good news - too many cars on the roads already which people cannot afford.

Please tell me how you know that.

Widely reported household debt.......... 94% of farmers in debt according to just last week, yathink some of that might just be for trucks or business vehicles they cant afford ?

Sounds to me about the same as most other countrys

[Srikcir]

"impending adjustment of the excise rate on cars with a larger engine is expected to result in a rise in sales of the said cars during the final three months of the year."

I doubt this will happen.

The local KR Household Economic Condition Index (KR-EIC) was at 43.8 in June, the lowest point in 11 months.

Consumers have became more cautious on spending and financial institutes hardened their lending policies.
Household sector has diminishing purchasing power while the living expenses continue to rise.

Total agricultural debt is 3 trillion baht.

Yet KTC plans on an 11% expansion for loans in major cities up-country and border areas. Maybe it is depending on the government to bail out new borrowers come next year.

[Jonmarleesco]

In the UK, business use IS the lease market; most private sales are HP or personal loans. I assume private lease-purchase is more common here?

[Jonmarleesco]

Good news - too many cars on the roads already which people cannot afford.

Please tell me how you know that.

Given the last Pheu Thai government's bright idea to increase auto production - hence cars on the road - following months of floods, I should imagine it to be fairly likely.

[Cake Monster]

This is just the kind of statement that should be expected. Only about 10 days ago, the bank stated that personal loans were to drop about 11%, and loans to " SME,s " about 17 % on the year.

Easy to see where Somchai spends his borrowed money on business development, and infrastructure, in order to be more competetive and efficient.

[Bodene]

Good news - too many cars on the roads already which people cannot afford.

Please tell me how you know that.

Widely reported household debt.......... 94% of farmers in debt according to just last week, yathink some of that might just be for trucks or business vehicles they cant afford ?

Sounds to me about the same as most other countrys

Can you support that?

[green job]

Answer to Boden. Have a look youself, seems you have a internet

[jadee]

In the UK, business use IS the lease market; most private sales are HP or personal loans. I assume private lease-purchase is more common here?

Hi, I was confused by this article too. I don't think private lease-purchase is at all common here. I think the article just means that the entire market is expected to shrink and K Leasing is targeting business customers, perhaps expecting to see growth in this area. They are just using the term 'lease' broadly. Almost all private car loans in Thailand are Hire Purchase, involving a down-payment and fixed monthly installments. In fact Hire Purchase is a type of lease as the customer only acquires ownership after the final payment is made. Business leasing, on the other hand, is a tax efficient way to preserve cash-flow as the payments are tax deductible, so perhaps K Leasing believe they can make more money by targeting businesses and lending them higher amounts for greater profits.

[Tomtomtom69]

"Special emphasis is being placed on the market for trucks used to transport cargo between countries in the Mekong region. Mr. Surat indicated that the aim was to achieve a whole-year lending growth of 1.5%."

But how can these trucks leave Thailand if they're being financed through hire purchase? Vehicles on hire purchase don't have customs authorization to leave Thailand.