By Bernie Cahiles-Magkilat
Kia Philippines is confident of meeting its 10,000 unit sales target for the year as local banks now allow car buyers of Kia vehicles low down payment financing schemes after the Ayala-owned AC Industrials became the official distributor of the Korean vehicle in the Philippines.
Manny Aligada, Kia Philippines president, said Kia buyers had trouble availing affordable bank loans before AC Industrials came on board and now with a reputable name as dealership, banks are willing to take on the risks of low down payments.
Aligada said they have recently sealed initial agreements with the major banks such as the Ayala Group’s Bank of the Philippine Islands, BDO Unibank, and East West Banking Corp. They are also finalizing deals with Philippine National Bank and Rizal Commercial Banking Corp.
With this thorny issue being put behind just a few weeks ago they have removed a major access barrier for its vehicle buyers, who are now allowed to post a low down payment of as low as P13,000 only.
Before AC Industrials acquired the dealership of Kia in the Philippines, Aligada said that banks rejected the Kia vehicles from their low down payment financing schemes.
“Picanto was not accepted largely because of its high closure or repossession rates, and financing was not available by the banks, overall,” he said.
Auto financing was allowed for other Kia models but still at a high 40 percent down payment while other brands were allowed a low of 20 percent down payment.
Kia was put at a big disadvantage and could not compete because 70 percent of car sales are under bank financing. When they launched the Soluto in February this year, banks still would not grant low down payment for KIA vehicles.
Aligada stressed the need to compete in the low down payment arena because a car buyer will first look at the model, then review how to acquire it, the down payment and then decide if it has the right value.