Sumisho eyes 15% of P40-billion RP motorcycle sales market

MANILA, Philippines - Sumisho Motor Finance Corp., the first motorcycle financing company in the Philippines, said it is eyeing a substantial 15 percent share of the P40-billion motorcycle sales market within a year.

A P2-billion joint venture between Philippine Savings Bank (PSBank) and Sumitomo Corp. of Japan, Sumisho will finance only Japanese-made motorcycles in the dominant 120 cc models.

“We are looking to open three to five Sumisho branches in Metro Manila next year, and bring the total nationwide branch network to 30 by 2014,” Hidetoshi Fukui, president and chief executive officer of Sumisho, said in a press briefing.

The country’s motorcycle industry turns is said to be over 700,000 units annually and is estimated to reach 1.5 million in five years’ time. While Japanese manufactured units dominate the field, the cheaper China-made motorcycles are slowly eating into the market.

PSBank president and chief executive officer Pascual Garcia III said the amount of motorcycle financing is estimated to reach P5 billion. “It is big and we want a fair share of the market,” he said.

Sumisho will cater to both individual buyers as well as corporate accounts, and will likely open financing schemes with dealers.

Majority of motorcycle dealers in the Philippines employ their own financing schemes through banks, non-bank financing institutions and money lenders.

However, Garcia said most dealers have limited access to credit for financing of their sales. He implied that entering into a financing arrangement with Sumisho and PSBank could easily double sales.

PSBank is also tied up with Toyota Financial Services Philippines Corp. (TFS Philippines), which is not only involved in auto financing but, in fact, has a quasi-banking license, which means that TFS Philippines can borrow money and in turn, relend it to individual or corporate borrowers.

Non-bank financial institutions with quasi-banking functions are authorized to borrow funds from the public for purposes of relending or purchasing of receivables, but are not permitted to issue deposit liabilities. These institutions must have a minimum capital of P300 million and a comprehensive risk management system.

TFS Philippines is 60 percent owned by Toyota Financial Services Corp., a leading financial services group based in Japan and controlled by Toyota Motor Corp. The remaining 40 percent is divided between PSBank with 25 percent and parent firm Metropolitan Bank & Trust Co. (Metrobank).

Sumitomo is a global, integrated trading and investment company with a wide and diverse range of business interests. In Asia, Sumitomo has invested in companies in China, Taiwan, Korea, Thailand, Singapore, Malaysia, the Philippines, Indonesia, Vietnam, and India.