Auto Financing To Consolidate
By Azlan Othman

Bandar Seri Begawan - The auto industry in the country will be working together with car finance companies to close up loopholes that will help reduce repossession rates and non-payments.

These are the measures taken with respect to next year's plan to protect the car brands and the relevant companies.

Auto industry analysts revealed that car financing companies in the sultanate will be consolidating their processes next year and working closer together with auto dealers in this huge multi-million industry-which is valued at more than B$360 million annually to ensure that "no crooks would buy the car and end up with payment difficulties".

In what is considered a win-win situation where everyone looks and takes care of one another, the analysts from the Automobile Industry Trader Association of Brunei (popularly known as PPAB) told Weekend that said such a measure is needed to ensure that no "crooks" would buy the car and to reduce the rate of repossession and defaults.

"In the old days, another person could buy the car on one's behalf, but end up with installment difficulties. Financing offices are set up at auto dealers so that it would be easy to process, ensuring good control while facilitating loan confirmation and credit check-in".

Official government statistics revealed that as in December 2005, motor vehicle hire purchase represented the bulk of finance loans which accounted for 98.8 per cent of the total loans which is equivalent to B$866.8 million, an increase of 21.2 per cent from 2004.

The other types of financed loans are Consumer Durables Hire Purchase and Lease Financing, which amounts to B$10.1 million and $0.6 million respectively.

Analysts also said that in this highly competitive industry, almost all auto dealers are now offering attractive packages including easy ownership or easy-to-buy schemes as some customers had previously found it difficult to pay an initial deposit. It was also noted that new models come almost at the same time this year.

The analysts added that last year, the sales almost reached its peak stage before sliding down in the first half of this year before surging again, thanks to the salary increment given to the government servants, which was announced during His Majesty's birthday titah last July.

Auto dealers sell an average of around 1,000 units monthly and it is expected that towards the end of this year, a total of some 12,000 units will be sold. They said that traditionally, towards the end of the year (November and December), sales are generally slow.

"The trend should be the same as for next year unless something special could boost car sales like the announcement of accelerated increment in July this year," dealers said.

One distributor however lamented that there's a setback as another 'reconditioned-car' company holds a permit to start selling here in the sultanate, making it the second company to do so, thus affecting the dealers.

PPAB statistics revealed that from January till September 2006, 8,815 units have been sold, with NBT (B) Sdn Bhd once again taking the largest share with 2,912 units sold. NBT introduced the new Toyota Camry yesterday and Avanza shortly while Lexus recently introduced the RX350 and IS300, with the LS460 making its way soon.

NBT was followed by GHK Motor, where 766 Mitsubishis and 649 Daihatsu models were sold, and Nissan, distributed by Boustead, with 633 units. October sales figures are not yet available. From January till September 2005, 11,143 units were sold.  -- Courtesy of Borneo Bulletin

Click Here To Have Your Say On This Story

Brudirect.com News

Brunei's Fastest Growing Website with