AEONTS steps into used car segment

Aeon Thana Sinsap Thailand Plc (AEONTS), a hire-purchase lender for household products and a credit card issuer, has branched into used car loans to capitalise on strong growth in the business.

The company aims to lend 500 million baht worth of used car loans this year.

Used car loans have solid growth and the company foresees great business opportunities to expand into its both current and new customer base, said managing director Kiyoyasu Asanuma.

The higher excise tax on new vehicles and stable used car prices have encouraged consumers to buy used cars.

“Last year, we saw a growth in the used car loan segment and greater opportunities to expand our existing customer base. We expect to extend 500 million baht in used car loans this year,” he said.

AEONTS is offering interest rates from 3.5% per year with the longest tenure seven years and the maximum credit limit, which is equivalent to the purchase price — without requirement of any guarantors.

The local unit of Japan-based AEON Group plans to expand the used car loan services nationwide by 2020.

AEONTS has launched the service in Bangkok and its vicinity and expects the company’s used car loans will be offered by over 400 used-car dealers by the end of 2018.

First-time workers and working-age customers who are 25-45 years old are the company’s key market segment.

The higher purchasing power of that customer segment will facilitate the company’s business expansion.

It expects to offer loans to buyers of around 1,400 used cars this year.

A source in the auto loan market said AEON will study the business in Thailand and has started with used car loans because it has higher yields compared with the squeezed margins and intense competition in new car loan business.

Moreover, used car loans can use several tactics such as various pricing structures, down payments, and loan periods to attract borrowers, the source said. AEONTS’s strong credit card and personal loan customer base also support the company’s new business.

“The central bank’s tighter rules governing unsecured loan products would be another reason compelling the company to search for a new business segment,” the source said.

AEONTS shares closed yesterday on the SET at 165 baht, unchanged, in trade worth 227 million baht.