According to analysts at K Research car sales will probably increase by around 5% this year which will bring the number of sales from around 830,000 to around 870,000 units sold
The bullish interest rate and rise in energy prices have not deterred car interest in smaller passenger cars and eco models, which, as the research house has added, will put the car loans at around 500-600 billion baht. That’s around 9,000 baht for every Man, woman and child in Thailand.
The lenders will be battling it out over pricing strategies and there’s not much in it. Auto-loan interest rates may edge up slightly by 0.1 to 0.2 per cent over the 2010 year-end rates, to reach 2.1 or 2.2 per cent, tailing off slightly to attract more from the motor expos
Funding costs hikes will probably outweigh any increases in interest rate rises – or on a par with them, considering that pricing structures in the auto-loan business have been skewed somewhat by fierce competition between lenders attempting to take the larger market shares.
The analysts also see little movement in their lending criteria as they will still require 20-25% deposit and maximum term over 60 months, again this is the reason Thailand is awash with 1 year old cars for sale.
We will not see much change in the names of the big lenders and it will also lead to a slightly higher number of people selling the cars for cash as they can not afford the payments.
Financially speaking a car is an awful investment and going to the bank to get the money and pay ‘interest on a loan on an awful investment’, seems ludicrous , but a car is a car and it is essential for some families and business. and the Thais will always see the car/truck as a status symbol and will not be deterred very much from this thinking.
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