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 hirepurchase 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 the car sales considerably in 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?
Thailand Auto Finance Market Research Report and Market Forecast: Ken Research
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