Krungsri Auto, the auto lending unit of Bank of Ayudhya (BAY), expects new auto loans this year to rise by 6% or an additional 133 billion baht, outpacing the country's new-car sales.
New-car sales for the full year are expected to reach 740,000-750,000 units, down 6-7% year-on-year, said Pairote Cheunkrut, head of Krungsri Auto Group.
Outstanding loans should expand to 277 billion baht, up 9% from the end of last year.
Mr Pairote said Krungsri Auto could maintain positive growth amid the negative climate because of the company's strong infrastructure base, marketing campaigns, and partnership strategy in all business segments, including both new and used car loans.
For the first nine months of the year, the company showed new-car loan growth of 24% year-on-year.
Used car loans, meanwhile, grew 13%, motorcycle loans increased 33%, and auto refinancing loans rose 2%.
Even though new-car sales contracted, used car sales are expected to grow to 2 million units this year or 7% year-on-year.
Motorbike sales are set to hit 1.73 million units, an increase of 4%.
"We predict both the country's new-car sales and auto loan industry will bottom out by the end of this year, and then rebound next year in line with improving momentum," he said.
Even though Krungsri Auto could see loan expansion above the industry average, the company's non-performing loans stood below 2%, said Mr Pairote.
In 2017, Thailand's vehicle industry is expected to show positive growth in all areas.
The company predicts new-car sales growth of 3-5%, used car sale growth of 5%, and new motorbike sales growth of 3.5%.
Under that scenario, Krungsri Auto would extend auto loans at a rate higher than market growth in all segments.
Its 2017 business plan, however, has not been finalised.
Mr Pairote said the company will continue to focus on digital development to strengthen its business next year.
Digital transactions are expected to increase significantly from next year.
He said its online channel has performed well, potentially generating 600 million baht in new auto loans by year-end, up from the previous target of 500 million.
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