Union Bank of Taiwan (聯邦銀行), the first domestic bank to offer loans to buyers of large motorcycles, said yesterday it saw little threat from Taishin International Bank’s (台新銀行) move to tap this market with claims that it offers lower interest.
“The loan’s earmarked interest rate would depend on the borrower’s credit history, and our rates aren’t necessarily higher since we’ve been in the business for many years,” Russell Tai (戴志男), a manager of Union Bank’s auto loan department, said by telephone yesterday.
EXPERIENCE
He said that the bank had years of experience doing business with motorcycle dealers.
Since 2002, Union Bank has given out more than NT$700 million (US$22 million) in loans with an average rate of between 5 percent and 7 percent to more than 2,000 motorcycle buyers, he said.
Motorcycles have attracted strong market interest this year as motorists deserted four-wheelers amid soaring fuel prices. During the first eight months of the year, motorcycle sales increased 4.5 percent year-on-year to 535,255 units, government data released earlier this week showed.
Taishin recently tapped into this niche loan market by offering loans of up to NT$1 million per bike, with an interest rate of zero to 8 percent with up to five years to pay.
“The lowest — zero — interest rate depends on whether motorcycle dealers are willing to absorb the interest rate cost by promoting certain brands of bikes,” Amy Hsia (夏敏蘭), a senior vice president at Taishin, said by telephone yesterday.
PROMISING
Hsia said that Taishin had found this emerging business promising.
Most large motorcycle models are imported brands such as Ducati from Italy and Kawasaki, Yamaha and Suzuki from Japan, which costs between NT$300,000 and NT$600,000 per bike, Taishin said.
Harley-Davidsons or bikes by BMW from Germany are much more expensive, costing more than NT$1 million each, it added.
The bank’s survey found that the motorcycle loan market could see a minimum 20 percent growth annually, which translates into NT$800 million to NT$1 billion in business opportunities each year, Hsia said.
Most buyers are wealthy male individuals aged over 40 who have time to appreciate such sports.
Motorcycle registrations in Taiwan reached 60,000 last year, up 85 percent from the previous year, Taishin said.
The bank added that payment is also convenient, as borrowers whose monthly installments fall below NT$20,000 could settle their bills at 7-Eleven outlets nationwide.
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