Thailand Auto Finance Market Research Report and Market Forecast: Ken Research

What is the Current Potential of Thailand Auto Finance Market?

The auto hire-purchase sector tends to align itself with the domestic market for automobiles. Given its relationship with this market, the sector naturally plays an important role in the overall growth of the economy. During the last 5 years, the hire-purchase market has been sluggish and thus lenders (supply side entities) have relied on financing other range of products and have extended reach into related markets. The credit disbursed in the Thailand Auto Finance Market has increased from THB ~ billion in 2013 to THB ~ billion in 2018. The sales of motorcycles increased in the year 2012 to ~ due to the high price of the agricultural products caused partly by the rice-pledging scheme and partly by the high oil prices. Thai population has been decreasing considerably at a CAGR of ~%. The sales of motorcycles declined in 2014 & 2015 owing to the intense drought and falling farm income which was dragged down by sliding oil prices. The new law changed the base for tax computations to the recommended retail prices from the existing ex-factory prices and cost, insurance, and freight values. The rising excise tax led to an increase in car sales considerably at the end of 2015. The new regime was to come into effect from 2016 and thus the customer base increased the purchase of new cars in 2015. However, after the regime came into effect the sales of new cars feel down drastically whereas the sales of used cars went up to 2,018,000 units in 2017. The penetration rates for both new and used cars have increased in 2018.

What is the General value chain in Thailand Auto Finance market?

Financing companies including Banks and Captive Finances acquire their customers mainly through dealers, therefore, they need to provide incentives for the same. Once the customer approaches the dealer, he collects information from the client and forwards that information to one or more prospective car financing companies. If the lender(s) chooses to finance your loan, they may authorize or quote an interest rate to the dealer to finance the loan, referred to as the “buy rate.” The interest rate that the client negotiates with the dealer may be higher than the “buy rate” because it may include an amount that compensates the dealer for handling the financing. Dealers may have the discretion to charge the client more than the buy rate they receive from a lender, so the client may be able to negotiate the interest rate the dealer quote. The company lays down its various product offerings and its terms and conditions along with the list of required documentation. Further, the company carries out a thorough credit screening of the applicant. Credit screening is labor intensive as there is no useful credit information agency in Thailand and screening is done through buyer workplace/home visits, interviews with neighbors. The approval is then sent to the applicant and further he is required to submit the down payment. The financing companies usually call to remind automobile debtors to repay their loans via bank transfer from a call center. If financing companies have to seize/sell collateral after an overdue loan, auto financing companies normally outsource the work to external contractors.

What is the important market segmentation in the Thailand Auto Finance Market?

By Type of Vehicles: On the basis of credit disbursed for commercial vehicles registered a CAGR of above ~% during 2013-2018 comprising of a major share in 2018. On the basis of an auto loan outstanding, passenger vehicle recorded a CAGR above ~% while commercial vehicles experienced a CAGR of above ~%. Commercial vehicle finance has led the space by capturing a share of over ~% in 2018. The first buyer scheme was a boon for the market in its initial years; however, eventually, it failed because of the slow growth in the economy after the scheme.

By New and Used Cars: New vehicles have led the market share on the basis of both, credit disbursed and auto loan outstanding capturing more than ~% of the market in 2018. Major factors responsible for the same have been government regulations, new tax system, changing macroeconomic factors like interest rates, consumer confidence index and household income.

By Type of Institutions: By auto loan outstanding, banks & subsidiaries have led the market capturing almost ~% of market share in 2018. This was followed by captive finances which are growing at a faster pace due to low interest charged. Lowest share was comprised by NBFIs.

By Loan Tenure: On the basis of the auto loan outstanding, 3-year loan tenure has been the most popular one capturing almost ~% market share in 2018. This was followed by 2-year loan tenure which is usually taken up for second-hand vehicles. This was followed by 4 years and 1-year tenure while 5 years and above was the least popular segment in the market in 2018.

Key Segments Covered:-

Type of Vehicles (Passenger Vehicles and Commercial Vehicles on the basis of Credit Disbursed and Auto Loan Outstanding)

New and Used Cars (On the Basis of Number of Vehicles Financed and Auto Loan Outstanding)

Type of Institutions (Banks & Subsidiaries, Captive Finances and Non-Bank Financial Institutes on the Basis of Auto Loan Outstanding)

Loan Tenure (1 Year, 2 Years, 3 Years, 4 Years, 5 and more years on the basis of Auto Loan Outstanding)

Key Target Audience:-

Existing Auto Finance Companies

Banks & Subsidiaries

Auto OEM Captive Finance Companies

Non-Banking Financial Institutions

New Market Entrants

Automobile Financing Companies

Government Organizations

Investors

Automobile Associations

Automobile Original Equipment Manufacturer

Time Period Captured in the Report:-

Financial Year 2013-2018: Historical Period

Financial Year 2019-2023: Future Forecast

Companies Covered:-

Banks:

Thanachart Public Company Limited, Siam Commercial Bank Public Company Limited, Kasikorn Bank Public Company Limited, Kiatnakin Bank Public Company Limited, Bank of Ayudhya Public Company Limited and TISCO Bank Public Company Limited

Subsidiaries:

Ratchathani Leasing Public Company Limited, Thanachart Group Leasing Company Limited, Ayudhya Capital Auto Lease Public Company Limited, Ayudhya Capital Services Company Limited, Krungsri LEASING Services Company Limited, Ngern Tid Lor Company Limited, TISCO Leasing Company Limited, TISCO Tokyo Leasing Company Limited, Kasikorn Leasing Company Limited AND Kiatnakin Leasing Company Limited.

Captive Finances:

Toyota Leasing Thailand, Mercedes-Benz Leasing, BMW Financial Services, MITSU Leasing Thailand, Ford Services Thailand Company Limited, Honda Leasing Thailand Company Limited, Hyundai Motor Thailand Company Limited, Kia Motors Finance, Mazda Financial Services Limited, Suzuki Motor Thailand Company Limited, Volvo Financial Services, Tri Petch Isuzu Leasing Company Limited, Land Rover Financial Services, Mini Financial Services, Porsche Financial Services And Thai Rung Union Car Public Company Limited

Non-Banks:

Ayudhya Capital Services Company Limited, Ayudhya Capital Auto Lease Public Company Limited, Asia Sermkij Leasing Public Company Limited, Ngern Tid Lor Company Limited, Jmt Network Services, SGF Automotive, Thai Ace Capital, Aeon Thana Sinsap Public Company Limited, Summit Capital Leasing Company Limited, Nakonluang Capital Public Company Limited, J Money Company, G Capital Public Company Limited and Thiensurat Leasing Company Limited

Keywords:-

Market Research Report of Thailand Auto Finance Market

Thailand Auto Credit Disbursed

Thailand Auto Finance Market Research Report

Leasing Market Thailand

Loan Sale Purchase Thailand

Non-Bank Institutes Thailand

Thailand Auto Finance History

Thailand Auto Credit Future Growth

Motorbike Loan Thailand

Bank Auto Finance Thailand

Loan Outstanding Thailand