Mercedes-Benz Leasing expects uptick in loans

Company sees 30-40% growth in 2017

Supavut: Push into commercial vehicles

Mercedes-Benz Leasing Thailand, the captive finance firm of the German luxury carmaker, is upbeat about loan growth this year on the back of improved market sentiment.

The company said yesterday its loan portfolio climbed 7% to 33 billion baht during the first half while new loans jumped 14-15% to 6 billion baht.

According to managing director Supavut Jiramanusnakorn, Mercedes-Benz performed well in Thailand with 6,679 units sold, up 25.4% year-on-year in the first six months.

"The luxury market has showed signs of recovery after a small contraction last year, and I forecast it will see positive momentum throughout the second half," Mr Supavut said.

Mercedes-Benz Leasing also expects its loan portfolio this year to reach 40 billion baht, up 29% from the previous expectation of 35-36 billion baht.

New loans are expected to grow 30-40% in 2017 to 13-14 billion baht.

Mr Supavut said the company's non-performing loans (NPLs) are still low at 0.3-0.4%, but attributed this to the high quality of Mercedes-Benz customers. NPLs for overall household lending are slightly higher at 2.5%.

The company's market share among hire-purchase firms remained unchanged at 50% in the first six months.

Mr Supavut said the company will also provide loans for a new local unit, Daimler Commercial Vehicles Thailand (DCVT), which handles bus and truck distribution. It was set up last August.

Fuso trucks will be the first brand marketed by DCVT, which will have an assembly contract with a local partner to make 3,000 commercial vehicles a year in Laem Chabang district in Chon Buri province.

Operations are scheduled to start by November.

"From the last quarter of this year onward, our loan portfolio will focus on passenger cars along with commercial vehicles," Mr Supavut said, adding that loans for Mercedes-Benz cars contribute 95% of the total portfolio.

"I expect loans for commercial vehicles to account for 30% over the next 3-4 years," he said.

Mr Supavut said the Fuso brand is well-known among Thai customers.

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