Electronic chains for growth

Electronic chains for growth

Krungsri Auto predicts digitization surge

Ms Kittiya said online channels are expected to account for 4% of the company’s total new auto loans this year, up from 2.4% last year.

Krungsri Auto, a vehicle lending unit of Bank of Ayudhya, is stepping up its digitization efforts to increase auto lending this year.

According to Kittiya Srisanit, head of Krungsri Auto Group, despite the persistent challenges of the pandemic, digitization and collaboration with partners are the key strategies to facilitate the company’s growth this year.

Krungsri Auto is targeting 173 billion baht in new auto loan bookings this year, up 11% from 2020.

Ms Kittiya said online channels covering digital platforms are expected to contribute 4% of the company’s total new auto loans this year, an increase of 2.4% from last year.

The company is committed to developing innovative digital platforms and new functionalities that meet the requirements of all related parties, including customers and business partners.

It launched a digital car loan platform, Krungsri Auto’s Go Application, in November last year and added a new feature in January called KANA, which provides advice on personal accident insurance. It has also adopted the iPartner platform, offering services and information to used car dealers.

After the launch of the Go app, the company reported that approval of its digital loan through the platform reached around 60-70 million baht.

Despite double-digit growth in new loan bookings, the company still expects only a marginal rate of growth in total outstanding loans due to the ongoing pandemic.

Krungsri Auto aims to expand its total auto loan portfolio to 428 billion baht this year, up 1.2% from 423 billion baht in 2020. Paying special attention to the quality of assets, it aims to control the ratio of non-performing loans (NPL) to no more than 2% this year.

“In the midst of the pandemic, we have slowed down our loan offerings to certain customer segments hit hard by the pandemic. We can keep our bad debt rate at a satisfactory level while maintaining the rate of rejection of loan products,” she declared.

Ms Kittiya said Krungsri Auto is ready to provide debt relief measures to customers who are unable to pay debt as usual due to the impact of the pandemic on a case-by-case basis. It has offered several debt assistance programs to approximately 90,000 auto loan borrowers who were affected by the new wave of the pandemic in December of last year.

With the improvement in economic activity thanks to the government’s effective measures to contain the pandemic, about 80% of all clients who requested the debt relief measures were able to exit the financial assistance program.

Ms Kittiya said the country’s consumption and private investment were showing signs of recovery. With this scenario, the company expects a gradual recovery in the new car market, with annual sales estimated at 810,000 units, an increase of 2.5% from 2020.

The overall auto finance market is also expected to grow at a comparative level of 1.5 percent, with a projected total market value of 494 billion baht this year.

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About Harold Shirley

Harold Shirley

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