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Krungsri Auto set to resume marketing drive in H2

Ayudhya Capital Auto Lease, or Krungsri Auto, will resume its marketing campaigns in the second half of the year after seeing signs of returning consumer confidence.

The company had suspended its marketing budget in the first half because of a decline in the public's purchasing power, said Pairote Cheunkrut, Krungsri Auto managing director.

"We concentrated on debt collection and risk management in the first half in line with the gloomy economy but when the situation changes, we think we should refocus on injecting a budget into promotion campaigns and joining auto dealers to offer attractive programmes to consumers," he said.

The company had planned to air its new TV advertisement for auto refinance in early May to cash in on children returning to school, but it was suspended because people were not spending. He said the spot would air soon.

Manufacturers have lowered the forecast for total auto sales this year from 1 million units to 900,000.

Krungsri Auto hopes that the focus on big motorcycles continues as that market is part of its strategy to mix up its portfolio to reduce risk.

The company, an auto and motorcycle instalment-plan subsidiary of the Bank of Ayudhya, has one team that handles normal bikes by focusing on the upcountry market and another team the handles these machines in Bangkok.

Big-bike buyers are generally wealthy people who are a lower financial risk than buyers of normal bikes, Pairote said.

Krungsri has forecast big-bike sales this year growing by no less than 20 per cent to 31,200 units while the normal bike market is expected to drop 7 per cent to 1.85 million units.

For the bike market, Krungsri's new loans are expected to grow 11 per cent to Bt8.6 billion, of which 25 per cent is for big motorcycles.

Its outstanding loans for the overall motorcycle segment this year are targeted to reach Bt12 billion, or an increase of 20 per cent from 2013.

In the first five months of this year, its loans for big motorcycles grew 26 per cent compared with a rise of 2 per cent for normal bikes.

New-loan bookings in the first five months were Bt3.5 billion, up 10 per cent year on year. The company hopes new loans in the first half of the year will hit the Bt4.4-billion target.

Pairote said the normal bike segment was challenging for Krungsri, which was attempting to expand its upcountry services.

However, payments to farmers under the rice-pledging scheme could shore up the bike market in the second half given that farmers are key customers for instalment lenders, he said.


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