Daimler AG, the world’s third-largest luxury carmaker, plans to boost loans in Asia and Africa by at least half in the next two years as rising wealth in China fuels demand for its Mercedes-Benz vehicles.
Daimler Financial Services AG, the automaker’s financing business, is targeting a loan portfolio of 18 billion euros ($23 billion) for the two regions by 2014, Richard A. Howard, the unit’s Asia and Africa head, said in an interview in Singapore yesterday.
The number of Asia-Pacific millionaires increased almost 2 percent last year, outnumbering those in North America for the first time, according to the World Wealth Report published by Royal Bank of Canada and Capgemini SA. Among major markets, China ranked second in Mercedes-Benz car sales growth in the quarter ended June 30, as the world’s rich cope with a slowing economy and the European debt crisis.
“The center of the automotive universe is now in Asia,” Howard said, adding China and India will lead Daimler Financial’s expansion in the countries he oversees. “There’s a huge potential to grow and get the numbers here at least to the global average.”
The unit finances half of all cars sold globally by Stuttgart, Germany-based Daimler, Howard said, and it lends for one of every five cars it sells in Asia. The region will jump from about 85 percent to 90 percent of his loan portfolio by 2014, he said.
Auto financing companies provided about 200 billion yuan ($31 billion) of loans last year in China, according to carmaker Guangzhou Automobile Group Co. The China Association of Automobile Manufacturers projects the market for vehicle loans will more than double to 525 billion yuan by 2025.
In other Asian markets, Daimler intends to start lending in Malaysia later this year and Indonesia next year, Howard said.
Japan, Australia and South Africa, which he characterized as “mature markets,” and Korea and Thailand will also contribute to his unit’s 2014 growth target, Howard said.