Banks slow down auto loan processing – Manila Bulletin

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Banks are slowing down processing of auto loan applications while automakers encourage cash purchases even as the industry is expected to end the year with 275,000 unit sales, according to Kia Philippines.

Manny Aligada, president of Kia Philippines, told a webinar that although banks are actively lending, taking out loans may take longer than usual.

“The banks are active again, but now they have to provide a more in-depth review, one if the applicant is employed and the second if the industry they are in is also a running business,” Aligada said, adding that the banks were performing additional background checks if the borrower is still employed to validate their ability to continue paying the loan and if they belong to an industry heavily affected by the financial crisis due to the COVID-19 pandemic.

In the case of Kia, owned by Ayala, its main partner bank is BPI Family Savings Bank.

Due to the in-depth review that financial institutions must undergo, Aligada said loan processing takes three weeks, compared to just days before COVID.

Aligada asked banks to upgrade processing to two weeks to help provide capacity to the industry. In the case of Kia, Aligada said they are helping their dealerships shortlist applicants so prospects have a better chance of being approved.

Aligada explained that the banks are strengthening the selection of candidates because they also have a portfolio to protect. With the economy gradually reopening, he said processing of auto loan applications is expected to improve.

As auto loan approvals take longer, auto makers are also encouraging car purchases with cash payments by offering deep discounts.

“If you have the money, now is the best time to buy,” said Aligada, citing huge discounts for its vehicle models of up to 70,000P.

“If you are a cash buyer, we provide you with opportunities that are better than the usual prices, but if you don’t have a cash out, we also make sure that the banks are there to support you,” he said. -he adds.

Meanwhile, Aligada said that even though the Philippine auto industry has suffered a 52% drop in sales so far, he is still optimistic that the industry may achieve a smaller drop in the coming months. He predicted that sales would improve to 275,000 units by the end of this year from 417,000 units last year, noting the sales surge after the sharp drops in April.

Last year, Kia Philippines contributed 1.2 percent of total sales to settle in the 10th sport among local players. With projected sales of 275,000 units, Aligada expressed hope to improve its market share from 1.5% to 1.6% this year.

In fact, Kia is optimistic about expanding its current network from 30 dealers to 34 by the end of this year with the opening of new dealerships at BGC, Marikina, Fairview and Santiago, Isabela. It also adds four to have a total of 38 outlets in 2021, when the industry is expected to make a full recovery.

Kia Philippines will also present its 11th model around the fourth quarter of this year. The still unknown model will be available in the fourth quarter of this year.

For now, Kia is banking its commercial performance on its three models – the entry models Picanto and Soluto and its versatile utility K2500 for entrepreneurial use.

“By July 31, customers can take advantage of a low down payment financing program or huge cash back rewards for these models,” said Aligada.

Kia Philippines will also unveil its virtual showroom in Q4 where customers can get a 360-degree online view of Kia car models.

The automaker’s optimism is rooted in the usual resilience attributed to Filipinos to embrace and overcome any crisis.

“This Filipino grain is what we are banking on,” he said.

In any crisis, Aligada said, there are beneficiaries. This time around, there will be a need for mobility for individuals to ensure their health and safety away from the contagion of the coronavirus. There is also a need for vehicles to help contractors and the logistics industry deliver goods.


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