Characteristics of Product and Service THANI offers auto hire purchase and financial lease services with focus on auto hire purchase market in which it had special expertise. This included the market for both used and new commercial vehicles such as pick-ups, taxis, truck tractors and lorries, as well as the market for used sedans (secondhand). As of 31 December 2021, THANI’s loans for new cars accounted for 69 percent of total loan portfolio with used cars accounting for the remaining 31 percent. In addition, in 2020, emphasis was still placed on the market for commercial vehicles, both new and secondhand. In this connection, the commercial vehicles accounted for 65 percent while other vehicles accounted for the remaining 35 percent. Once a customer paid off an installment plan, the ownership of the car would be transferred to the customer. Used car hire purchase is relatively more risky than new car. In addition, the risk is mainly from car for commercial transportation which is sensitive to the domestic economy. THANI has taken into consideration various factors in loan approval, such as car condition, market price, substantial documentation, car registration, etc. The team has high experience and specific expertise on the condition evaluation and used car market price, checking of car registration documents, and among others. As a result, it was necessary to put in place a work team consisting of staff with experience in checking the condition and market prices of used cars. Moreover, THANI offers after-sales services which are connected to its main businesses consisting of hire purchase and financial lease. Among others, the services include annual tax registration renewal, coordination on renewal of insurance policies, as well as technical check of car prior to tax registration renewal. The services not only provide customers with convenience, but also help earn supplemental income for THANI. Moreover, the services are beneficial in the form of asset protection for customers and damage protection for THANI. Market and Competition The year 2021 was the second consecutive year in which the COVID-19 pandemic remained severe. As a result, the state reinstated a countrywide lockdown. The Thai economic sector was considerably affected by the disruptions in economic activities. As well household income dropped while the private sector’s spending and investment slowed down. Under the situation whereby the COVID-19 pandemic still had impacts not only on the economy throughout 2021 but also on the business sector’s operations, particularly in lending business, lenders had to implement the cautious lending policy in their business operations by placing emphasis on quality loans. Furthermore, the state’s tighter oversight of retail loans gave rise to captive financing services whose providers competed in the market and played a more active role in the industry. As a result, THANI had to take steps to speed up the development of various strategies, aiming at expanding the market, particularly through digital platforms which would enable THANI to reach a diverse range of potential customer groups. This would serve as an important factor in maintaining business competitiveness in the future. However, THANI planned to maintain its commercial vehicles hire purchase lending in the next 3-5 years at 65 - 70 percent of THANI’s hire purchase portfolio. The reason was that this customer group was expected to grow continuously and to generate high profitability. In addition, THANI’s extensive experience and business expertise proved to be advantageous for competitiveness, customer retention, high return paid to used car dealers, fast services, market share retention, and extending relationship with used car dealers, in order to increase business opportunities and business channels. 56-1 One Report / Annual Report 2021 Thanachart Capital Publ ic Company Limited 29
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