Proton's finance arm also pointed out that 80% of its customers choose 9-year hire-purchase financing plans and that it has impaired loan rates that are up to three times lower than the industry average.
“Last year was a tough year for the industry as financial institutions had to make modification loss provisions for the 6-month moratorium programme announced by the central bank," Proton Commerce CEO Mooi Fi Phang said on Wednesday.
"Thankfully for Proton Commerce, the financial stability of our customer base meant a very low number of our borrowers opted for subsequent moratorium and with the removal of the provisions this year, we expect to contribute a healthy profit to our shareholders.”
Mooi.
On Proton's sales performance, Mooi said it got off to a bright start in 2021, recording first quarter sales that were the highest sinch March 2012.
Proton Commerce said the strong sales signal the potential to issue even more loans to qualified customers.
The company — a 50-50 joint venture between CIMB and Proton's distribution arm Proton Edar — has seen its loan volume grow in tandem with the increase in Proton sales.
In 2018, it disbursed a total of 5,410 loans, which nearly doubled to 10,668 the following year. For 2020, despite disruptions caused by the coronavirus as well as loan moratoriums to ease the burden on distressed borrowers, Proton Commerce had disbursed 14,189 loans.
It is aiming for a record-breaking volume of 20,000 this year.
“Although there was a downturn in many economic sectors caused by the Covid-19 pandemic, consumer demand for cars remains positive. Proton’s gains in product quality, its additions to the dealer network and the launch of new models have attracted interest in its cars and we are seeing the results in the number of loan applications received.
“Our loan disbursement volume for Q1 this year has increased by 42.3% and we are confident of our volume growing even more in Q2. However, the hire-purchase market could face a tough second half of the year as the Penjana sales tax incentive is scheduled to expire at the end of June so the industry could see a period of correction as market demand finds its natural level,” said Mooi.
