Increased usage of online platforms and technologies in auto financing are some of the key trends in Thailand’s Auto Finance Market: Ken Research
Government investment and growth in online retail and logistics created a greater demand for commercial vehicles in the country, where the Auto finance market of Thailand has seen some major growth in the share of commercial vehicles post covid-19.
Decline in Growth Rate: Since people purchasing power decreased due to the epidemic, there has been a dip in the market for new and used cars, which has negatively impacted Thailand's auto finance industry. Due to the COVID-19 pandemic, vehicle loans have been disrupted for a number of reasons, including a decrease in the number of chips required for mass-produced automobiles. The fact that a new car was a depreciating asset made the purchase seem less significant. Moreover, Thailand's major cities provide affordable, quick public transportation.
Post-Covid Recovery, Road Expansion, and Development: Sales in the automotive sector were impacted by COVID-19 and the work-from-home culture. However, as offices reopen and business activity picks up in the nation in 2022, sales start to increase. Private vehicle demand in the nation increased as a result of road construction and infrastructure expansion. Increased automobile sales in the nation are also a result of the people's improved economic situation. Good economic conditions and rising consumer spending power made new automobiles more affordable for more people, which fueled the country's auto market's expansion.
Automotive Policy in Thailand: Thailand has supported EVs by lowering import tariffs on EV vehicles ranging from 0 to 40% until 2023, depending on the size of the engine. The Thai government adopted a set of incentives, including tax breaks and subsidies, to encourage the use and production of electric vehicles (EVs) between 2022 and 2023.
Confusing and time-consuming terms and conditions: For a salesman and customer to successfully complete an average vehicle loan application in Thailand, a significant amount of paperwork is frequently needed. Consumers frequently perceive the conditions of their auto finance to be complicated and time-consuming since they have trouble understanding loan elements during loan discussions. The greatest barriers to poverty and inconsistent income are found in rural Thailand. The monthly budget may be stretched by making monthly auto finance payments.
Analysts at Ken Research in their latest publication “Thailand Auto Finance Market Outlook to 2026F- Driven by Road Infrastructure Development and Economic Growth in the Country” observed that the Auto Finance market is an emergent market in Vietnam at a rebounding stage from the economic crisis after the pandemic. The immense infrastructural development projects in the country, partnerships, and mergers with other banks along with the adoption of digitalization are expected to contribute to the market growth over the forecast period. The market is expected to grow at a 7.4% CAGR during 2021-2026F owing to the increasing purchasing power of consumers, adoption of EVs, and new government policies.
