4 days Ago
CIMB Thai Auto Co, a subsidiary of CIMB Thai Bank (CIMBT) specialising in used car loans, expects a market recovery next year supported by the gradual economic revival and lower interest rates. Visit Phuengpornsawan, the company's managing director, said both the used car industry and loans for these vehicles have bottomed out, and both markets are expected to gradually improve between the first and second quarters of 2025. He said the recovery should be propelled by the continued economic rebound and lower interest rates.
Since early 2024, CIMB Thai Auto's business has shown signs of improvement, with growth in both loan volume and asset quality following a challenging 2023. The company expects new loan bookings of 12 billion baht this year, bringing its total used car loan portfolio to 31 billion baht by year-end. For the coming year, CIMB Thai Auto aims for a new loan growth of around 14 billion baht.
The company expects its loan rejection rate to fall from the current rate of 25-30% of total loan applications. The focus will be on selective loan growth, targeting salaried individuals and loan applicants with established credit records in the National Credit Bureau (NCB), said Mr Visit. He said the past few years the company has focused on loan applicants with records in the NCB, increasing the proportion of this segment to around 75% of its total customer portfolio.
CIMB Thai Auto also requires higher down payments based on a client's risk profile. With improved risk management, it expects to reduce its non-performing loan ratio next year to below the current level of 1.9%.
Mr Visit said the company also wants to shift its focus towards car title loans and used motorcycle loans to diversify its lending portfolio. Over the next 3-4 years, CIMB Thai Auto aims to increase its total outstanding loans to 38-40 billion baht, with used car loans contributing 60%, and car title loans and used motorcycle loans each accounting for 20%, he said. Kriangpop Panurach, deputy managing director of CIMB Thai Auto, said the company aims to be the leader in the used motorcycle loan market in 3-4 years, increasing the loan portfolio share from 5% to 20%.
According to Mr Kriangpop, there is also growing demand for car title loans as consumers seek to improve liquidity amid an uneven economic recovery. To meet this demand, the company recently launched a campaign for car title loans, offering a special interest rate of 9.95% per year and a maximum credit line of 5 million baht per customer.
With this promotion, CIMB Thai Auto expects new title loan growth of 3 billion baht by 2025, he said..
