Premium Financial Services Co (PFS), a Japanese provider of car credit finance services, teamed up with SET-listed Eastern Commercial Leasing Plc (ECL) to tap into Thailand’;s thriving automotive market.
Headquartered in Tokyo, PFS, which also offers warranties on used-cars, insurance agencies, and planning and sales of financial products and services, entered into a business partnership yesterday with ECL, which operates hire purchase services of used-cars in Thailand.
“The Thai automotive industry is the most mature market in this region in terms of output, sales and financial services,” said Yohichi Shibata, PFS’;s president and chief executive. “Distributions of second-hand cars are also increasing, which opens up new business opportunities.”
The Automotive Industry Club of the Federation of Thai Industries (FTI) reported car production in 2013 stood at 2.457 million units, a record over 52 years, with domestic sales at 1.33 million units.
Japanese car manufacturers have a dominant market share in Thailand, controlling up to 90% and growing.
Thailand’;s used-car market was estimated to be worth 600 billion baht in 2013, while the leasing portfolio for the market is worth about 200 billion baht.
“Used-car financial service is now very strong in Thailand, but warranties on used-cars still need to be improved,” he said.
Thailand is the first country in which PFS secured a partnership. It is also looking for partners in Indonesia and Vietnam for deals over the next 3 years.
Established in July 2007, PFS operated 15 offices and 11,484 used-car distributors nationwide as of last September. PFS aims to increase its distributors to 20,000 by 2015. PFS now offers warranties for over 270,000 used-cars.
Danucha Verapong, ECL’;s chief executive, said the new warranty service will help boost the company’;s new hire-purchase lending to 1.2 billion baht this year, up from 700 million baht last year. Its total lending portfolio is expected to rise to 2.5 billion baht this year, up from 2 billion in 2013.
“The Thai used-car market has never had warranty service before,” he said. “We believe the partnership with PFS will not only provide us hire-purchase financing know-how, but also support our new business and product development.”
ECL reported revenue of 228.49 million baht last year, with profit of 45.85 million. The figures increased from 203.78 and 37.63 million baht, respectively, in 2012.
ECL’;s shares closed yesterday on the SET at 1.07 baht, up 4 satang, in trade worth 13.7 million baht.
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