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GL sure of reaching bike sales target despite unstable outlook

Group Lease Plc is confident that it will achieve the targeted sales of 12,000 motorcycles per month this year despite the economic outlook and political uncertainty.

Although the prospects for the motorcycle market this quarter were not good, GL outperformed with sales of 8,500 units in May, its highest month on record.

In the rest of this year, GL expects to increase its motorcycle-leasing market share to 10 per cent from about 7 per cent.

About 15 per cent of the motorcycle market is financed by small dealers. GL aims to

capture this market by expanding its dealer network, building relationships further with existing dealers and boosting service efficiency.

Mitsuji Konoshita, chairman and CEO, said yesterday that purchasing power remains stable. GL's customer target is the young generation, which is growing in number and in personal income. The lowering of the prices in the government's rice-pledging scheme will hardly dent its customers' purchasing power.

Another welcome development for GL is the likely sale of Bank of Ayudhya by GE Capital International Holdings.

Konoshita was surprised and pleased, as GE is GL's biggest competitor in the motorcycle-leasing market with a share of 7 per cent.

If GE leaves the market, GL will capture more of the market, up to at least 12 per cent by year-end because the Japanese bank will not be interested in the retail leasing market for at least three years, he said.

GL targets its portfolio at Bt5 billion with 5 per cent non-performing loans, up from over Bt4 billion and 4 per cent NPLs currently.

The Cambodian unit, its wholly owned GL Finance subsidiary, is performing well, with 700 motorcycles and no NPLs, except for two stolen units. GL targets sales increasing to 2,000 units per month this year and 4,000 per month next year as it enjoys exclusive contracts with Honda. GLF's sales are strongly tied to Honda's sales in Cambodia.

The Cambodian operation should start to make significant contributions to revenue next quarter, he added.


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