Thailand's used-car market appealing

[webfact]

Used-car market appealing
SUCHEERA PINIJPARAKARN
THE NATION

HIRE-PURCHASE FIRMS EXPECT TO BENEFIT FROM NEW EXCISE TAX

BANGKOK: -- HIRE purchase operators will shift their focus to the used-car segment because the new excise tax on cars, which comes into effect on January 1, will broaden the price gap between new and used cars.

The rate of car repossessions has also returned to normal, which shows that the hire purchase industry will start growing again in 2016 after witnessing a downturn when the first-car scheme ended.

Anuwat Luengtawekul, chief financial officer of Thanachart Bank, said the non-performing loans (NPL) of auto loans at TBank is stable, while the number of car repossessions have dropped by 50 per cent from over 100 units a month.

Praphan Anupong-ongarch, executive vice president of TBank, said the bank has adjusted its debt collection process, which has improved hire purchase NPLs and especially NPLs for used cars.

Used-car prices are expected to fall with the drop in the number of repossessions, which means this segment will have more interest for buyers and hire purchase operators, he said.

The new excise tax on new vehicles will also make the price of used cars with powerful engines more attractive as the gap between new and old cars with powerful engines will widen, he said.

TBank is the market leader in hire purchase, he said, and used cars and auto refinancing account for 30 per cent of its business.

Demand for auto refinancing is greater among the self-employed segment, he said, and the auto refinance outlook is better because this is the most convenient financial solution for consumers who own vehicles.

"Auto refinance is our focus and we hope to be the market leader in this segment in the near future," he said.

The hire purchase industry in 2016 is even expected to resume. The high level of household debt is a major concern for hire purchase providers because it will limit purchasing power and limit the number of people who qualify for lending.

Meanwhile, the used-car loan market is also a key area for Kiatnakin Bank, another player in the hire purchase segment.

Aphinant Klewpatinond, president of Kiatnakin Bank, said consumers would buy more used cars because of the attractive prices.

But he doesn't expect the new excise tax for automobiles to affect demand for new cars because people who can afford to buy cars with powerful engines can also afford to pay the tax.

Although the bank has shifted its focus to the used-car segment, it wants to diversify its loan portfolio and risk exposure to non-hire purchase loans in the medium term. Auto loans in the next three years should be 50 per cent of the total portfolio from the current 67 per cent, he said.

Source: http://www.nationmultimedia.com/business/Used-car-market-appealing-30273942.html


-- The Nation 2015-11-30

[MaiChai]

Is this drivel news or self promotion? Sounds more like industry news if you are in the car leasing business? Most of us are not?

[Rocceao]

From this article, It appears that they are saying the "10% deposit and the rest when you catch us new car program" didn't work out as planned and now there are a lot of second hand cars on the market, that people could't afford in the first place let alone being able to maitain the service schedule and general maitenance and upkeep.

So now that the repossessions have dropped by 50 per cent, we still have a lot of second hand cars that are sitting in car lots gathering dust, so supply and demand dictates that we have to move these vehicles, as the car lots who have borrowed millions of baht to purchase these vehicles, have the risk of going broke, if they can't make their 90 day sales payments to the banks.

If this happens, then the country will be left with alot of bankrupt car lots, and banks loosing millions of baht on repossessed car lots and accossiated assets that will be very hard to liquidate into Baht profits but Baht loss as they will not recieve any interest profits from the liquidated assets.

Looks like another previous govenment Scheme that had a short term spin and win for the people and left with a long term hole in that industry.

Thanks for taking the time to read my post.

Edited November 29, 2015 by Rocceao

[Seastallion]

"Used-car prices are expected to fall with the drop in the number of repossessions,"

How does that work? I would have thought it's the other way around....a market flooded with repo'ed cars should be cheaper than a market with fewer used cars.

[Artisi]

"Used-car prices are expected to fall with the drop in the number of repossessions,"

How does that work? I would have thought it's the other way around....a market flooded with repo'ed cars should be cheaper than a market with fewer used cars.

Never let logic get in the way......

[Yoram]

Somehow, I stopped paying attention to such proclamations and hot air talks, buyers will do this and that,

price up price down, will buy or will not buy, all conjectures and stabs in the dark, no creditable data

or real knowledge behind all of that, when a Thai person want to buy a car, no matter what the rules are,

and if they repossess it some months down the line than so be it.

[MaiChai]

"Used-car prices are expected to fall with the drop in the number of repossessions,"

How does that work? I would have thought it's the other way around....a market flooded with repo'ed cars should be cheaper than a market with fewer used cars.

Never let logic get in the way......

When you have less customers put up the price?

[apetley]

"Used-car prices are expected to fall with the drop in the number of repossessions,"

How does that work? I would have thought it's the other way around....a market flooded with repo'ed cars should be cheaper than a market with fewer used cars.

Never let logic get in the way......

When you have less customers put up the price?

That's what one of our old neighbours did. His Saluna sat in his driveway for 4 years as he tried to sell it. During that time it went from the initial 180k bht asking price to 220k bht. The last hike happened when a new model Vios appeared, something he insisted increased the value of the Saluna.

[trainman34014]

All car prices in this country are bonkers. They whine on about falling new car sales but won't offer a baht off for cash and the range of Thai built cars is too small. Second hand dealers can't be trusted, a lot are downright crooks, and the idea of just putting 'For Sale' signs on everything and no prices does not help shift vehicles at all.

[whatproblem]

When I brought my car I went to Toyota and asked to test drive one ( buriram) they said no have ,I asked when ,they said don't know ,I said what I do then ,they said go somewhere else , so I did .

[SoilSpoil]

We bought a second hand Civic in 2005 for 350k and sold it in 2011 for 330k.

Gotta love the second hand car market here. Hondas and Toyotas seem to keep their value.

Edited November 30, 2015 by SoilSpoil

[Time Traveller]

Is this drivel news or self promotion? Sounds more like industry news if you are in the car leasing business? Most of us are not?

So you clicked on a topic with the heading "Thailand's Used car market" , but you didn't want to read about the used car market?

What were you expecting to read about, fairies and pixies or something?

[trigpoint]

The price of second hand cars in this country is crazy,,the outskirts towns and cities are full of second hand cars, dealers unable to shift them because of the high price, Why buy a 3-4year old car that is only 200,000 baht less than a new one?

Never deal with Toyota, every one says the same, disinterested could,nt care less attitude. I went to buy a vigo a few years ago, needless to say I bought a Mazda bt 50, cheaper as well, and a better truck in my opinion.

[Emster23]

Did any of these wizards ever study Econ 101? May have taken a class, but seemed to learn nothing.....

[ParadiseLost]

Did any of these wizards ever study Econ 101? May have taken a class, but seemed to learn nothing.....

Most survive on the premise that the audience falls asleep after 10 minutes so why bother to provide any meaningful (researched, not copied) information.

This is precisely why it is extremely difficult to have a deep conversation with many here - their depth of knowledge in any subject is severely limited not only by their own attention span, but also of the person delivering the information to them.

A vicious circle that has resulted in today's parade of 'experts' lining up to make fools of themselves at the earliest opportunity. I am talking minister of science and his solution for river flooding, as a fine example.

[snowgard]

I showed some weeks ago some Thai friends 2.hand cars in europe and they can't believe that 10-20 years old cars saled so cheap.

http://www.autoscout24.com/results?atype=C&mmvmk0=13&ustate=N%2CU&ipc=home:searchbox&ipl=button

[ParadiseLost]

In Thailand a medium level clerk earns about 10,000 Baht per month, while the cheapest new car is about 700,000 Baht = 70 times.

In Europe, a medium level clerk earns about 3,000 Euro per month, while the cheapest new car is 9,000 Euro = 3 times.

Second hand car prices are even more outrageous here, compared with almost anywhere else in the world.

Malaysians are enslaved to their cars - the govt owns half of the car manufacturing so has little incentive to provide good public transport - especially far away from the tourist view... Many (poor) families have more than one car and loans run up to 9 years! Thais should take note and not let the same happen here.

Hopefully ASEAN will shake things up. Any change will be good.

[soomak]

In Thailand a medium level clerk earns about 10,000 Baht per month, while the cheapest new car is about 700,000 Baht = 70 times.

In Europe, a medium level clerk earns about 3,000 Euro per month, while the cheapest new car is 9,000 Euro = 3 times.

Second hand car prices are even more outrageous here, compared with almost anywhere else in the world.

Malaysians are enslaved to their cars - the govt owns half of the car manufacturing so has little incentive to provide good public transport - especially far away from the tourist view... Many (poor) families have more than one car and loans run up to 9 years! Thais should take note and not let the same happen here.

Hopefully ASEAN will shake things up. Any change will be good.

You are right about second hand prices, but just a small correction: cheapest new cars in Thailand were around 400-450,000 Baht (before any new excise tax increases)

http://www.honda.co.th/th/brio

http://www.carsut.com/mitsubishi-mirage-launched-from-380000-baht-with-22km-liter/

http://www.toyota.co.th/en/model/yaris

[ParadiseLost]

Thanks for the links you provided soomak - I was really under the impression cars were a little more expensive.

Still, just as sickening as it is about 40 times a Thai monthly salary, in place of 70...

I look at 2nd hand BMWs in UK mags with more envy and lust than porno mags these days.

[seajae]

seriously who would but a second hand thai car with the ways thais drive anyway. I see new cars(red plates) on the highway being totally flogged, convinced thais do not understand running a new motor in, they simply flog the sh*t out of it from the time they buy it. They continually speed up then slow down increasing the wear and tear on the running gear as well, and thats on a straight road, it happens with virtually every thai I have ever driven with. Yes they seem to like cleaning them a lot but with the way they are driven I wouldnt trust one enough to buy it especially at the prices they ask, much better paying the extra bit to get a new car with a warranty and one you can be sure hasnt had the crap flogged out of it plus you get to run in the motor the way it should be as well as driven in the correct manner.