According to Mr. Thawee Teerasoontornwong, KLeasing Executive Chairman, KLeasing's 2015 new loans amounted to 72.7 billion Baht, up 19.13 percent YoY. Of the total, hire purchase and financial lease registered 31.05 billion Baht, a decrease of 7.62 percent, while the remaining 41.66 billion Baht was granted under the Auto Dealer Floorplan product, which, in contrast, was up by 51.91 percent. The company's outstanding balance totaled 88.67 billion Baht at the end of 2015, down 1.24 percent YoY, in line with the market's over-year sluggish sales, while its non-performing loans (NPLs) stood at 1.50 percent. KLeasing's net profit for 2015 equaled 655 million Baht, a growth of 31.4 percent.
Looking ahead, the 2016 auto industry should stabilize compared to the previous year, with a negative growth projected at 4-8 percent, or total sales of approximately 735,000 to 765,000 units. KLeasing's 2016 business strategy will focus on high-growth potential markets including big bikes, pickups and larger trucks, while seeking marketing collaborations with business counterparties and partners. The company aims to extend 73.74 billion Baht of new hire purchase and financial lease, which would boost its outstanding balance to 91.95 billion Baht. NPLs are expected to reach 1.91 percent, while earnings are estimated at 728 million Baht.
This year's factors favorable for the auto industry include the government's accelerating investment projects which will partly boost domestic income, bright prospects of tourism, new car models to be launched throughout the year, and promotional campaigns to spur car sales amid the sluggish market. In addition, the first-car buyer program's requirement of five-year ownership holding will end this year, thus allowing these car owners to change their vehicles. This presents a good buying opportunity as carmakers and leasing companies are expected to compete through marketing promotions to attract customers.
In 2016, there should be higher demand for used cars after prices of new vehicles have been raised in line with new excise tax rates, while prices of small-sized passenger cars will be unchanged or even cut for some models. Rising demand for used cars may meet a falling supply of quality used vehicles. Despite the end of the above-stated five-year ownership holding requirement, some owners may opt to keep their old cars rather than buying new ones due to the higher new car prices, ongoing economic uncertainty and low spending power.
The big bike market grew 14 percent over-year in 2015, with 55,658 new units registered, while its outlook is positive for 2016 as market demand remains high. New models continue to be launched. Moreover, buyers are among high income earners who have not been affected by the current economic slowdown. Tourism promotion for many new provincial tourist attractions could also drive the big bike industry further in 2016, to double-digit growth.
Mr. Thawee added that Thai household debt, which used to be driven largely by auto financing, is likely to grow at a slower pace in 2016, in line with slumping car sales. To date, despite its increasing trends, the household debt to GDP ratio has risen slowly due mainly to many pressures in both supply and demand sides. Accumulated household debt is already at a high level and consumers lack confidence to accumulate new debts, while the economic slowdown and financial institutions' prudent credit policy during 2014-2015 have also discouraged further debt growth.