Summit Capital Leasing, a leading hire purchase subsidiary of Japan's Sumitomo Corporation, is confident that the motorcycle leasing business will resume riding the growth path as the economic recovery and consumer confidence show signs of returning follo
The company will fully expand its presence in the Northeast to capture more of the market.
CEO Wichit Phayuhanaveechai said yesterday that the motorcycle market had continued to decline since the middle of last year until it hit bottom in late January due to a combination of factors.
These include the Bt300 minimum wage hike and rising unemployment driven by the shutdowns of many industrial factories.
Companies faced rising labour and production costs so they turned to trimming employee benefits such as medical welfare and overtime pay rates.
The prolonged political tensions dragged down the confidence of consumers and investors alike.
In the first half, motorcycle sales braked 20 per cent, with late January the lowest point at 42 per cent compared to the corresponding half of last year when the political confrontation reached a climax.
However, Summit Capital Leasing was relatively unscathed as most of its business and customer base are in provincial towns.
Sales for the whole year are estimated to fall 15 per cent. This year is expected to see 1.7 million new registered motorcycles, down from 2 million units last year. Also, 820,000 new motorcycles are likely to be registered in the second half of this year, decreasing by only 6 per cent.
That is a vast improvement from the same half last year when the market contracted 17 per cent from 2012.
The outlook optimistic is mainly driven by the recovering con-fidence of consumers and investors following the National Council for Peace and Order’s speedy action in tackling economic issues and urgent problems.
In particular, the payments to farmers participating in the rice-pledging scheme helped boost nationwide purchasing power.
The company witnessed growth in all service areas in the first half except the central part – Greater Bangkok – which took the brunt of the political putrefaction.
The region with the highest growth for the company was the West, at 38 per cent, thanks to the lender’s significant expansion into this regional market.
In the rest of this year, the company plans extend its operations upcountry. It will open branches in Chon Buri’s Sattahip district, Prachuap Khiri Khan, Saraburi, Suphan Buri, Prachinburi and Chantaburi.
It will also cover more areas in northeastern markets as it finds that the region has high growth potential.