SUMMIT CAPITAL Leasing aims to be the market leader for the provision of hire purchase financing for motorcycles in Thailand this year, its president and CEO, Wichit Phayuhanaveechai, said.
The company, which is under Japan’s Sumitomo Corporation, has a target to boost 2018 total operating income by 25 per cent from last year, said Wichit, the first Thai chief executive of the company.
In 2017, the company enjoyed growth of 40 per cent in its total outstanding balance and 33 per cent in the number of new contracts for motorcycle hire-purchases, even though Thailand’s motorcycle market grew by only about 4 per cent over the year.
“Our firm, which has been in the market for 24 years, expects to get 120,000 leasing contracts for new motorcycles this year, which will be an increase of 7 per cent from last year,” he said.
Although he stated the company’s ambition for it to be the market No 1, Wichit declined to name the incumbent leader in the leasing market for new motorcycles.
“The total sales of new motorbikes last year were 1.87 million. This year, it is expected that the number will increase by between 3 to 5 per cent, to about 1.95 million,” he said.
In Thailand, about 40 per cent of the total sales of new motorcycles - or 800,000 - are purchased through leasing firms.
“Therefore, if we can provide loans for 120,000 new motorcycles, or about 15 per cent of the total sales, we can be the No 1.”
The firm has seen positive signs year. In January, it added 10,200 contracts for new motorcycles, the most since the company began offering motorcycle leasing services 24 years ago.
“A key factor that will help us achieve the 2018 target includes the positive business environment, including development of the Eastern Economic Corridor (EEC) project and the projected GDP growth rate of 4 per cent,” he said.
“The government’s investment in the infrastructure - particularly in the EEC – will help increase the purchasing power of people at the grassroots level, as such people are the main base for our potential customers.
“Therefore, the volume of our customers is expected to expand in line with the improving economic situation.”
Wichit said most of the company’s customers are typically ordinary workers, such as in the agricultural sector and those working in hotels and factories and the like, with a salary of about Bt10,000 to Bt12,000 per month. A better economy means that more and more people will buy motorbikes, he said.
The biggest group of customers for the leasing market is in the eastern region of the country, he said.
Among the company’s strategies to help it achieve the 2018 targets are the planned expansion in the number of branches and dealers as well as increased training for its sales staff that are stationed in dealers’ offices and are responsible for dealing with potential customers.
Wichit said the company has 33 branches in 69 provinces and plans to increase the number to 41 branches across 73 provinces, excluding the three provinces in the far South and Mae Hong Son.
“As the motorcycle leasing market is highly competitive, we invested about Bt60 million last year on new technology that is used between our dealers in the provinces and the staff in our headquarters, so that for a new leasing contract can be finalised quickly, with a customer knowing within 30 minutes of his application whether it will be approved,” Wichit said.
The company has measures in place to ensure that, through the speedy approval of leasing contracts, it can acquire good customers who can pay their debts, Wichit said, adding the firm’s non-performing loan ratio is less than 1 per cent.