Bank Central Asia (BCA), Indonesia’s largest private lender by market value, is blaming the bank’s contraction in automotive loans last year on the rise of ride-hailing apps and the “millennial lifestyle”.

President director Jahja Setiaatmadja said on Thursday that the rising use of smartphone apps to book a car or motorcycle ride had seen the bank’s automotive loan disbursement contract by 1.1 percent to Rp 47.63 trillion (US$3.47 billion) in 2019.

“The presence of online ride-hailing apps has made it more convenient for everyone to travel. This has also changed many people’s, especially millennials’, lifestyle in big cities, as they think they don’t really need to have their own vehicles anymore,” he explained during a press briefing in Jakarta.

Improved public transportation, especially in Jakarta, also played a role in the declining demand for vehicles, Jahja said, as people think they no longer need to own vehicles to get around.

Despite the decline, he said, the company still booked a 1.4 percent year-on-year (yoy) growth in loan disbursement for four-wheeled vehicles, as the bank’s subsidiary, BCA Finance, had become a market leader for car loans in the country.

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The drop in vehicle loan disbursement was mainly influenced by a sharp decline in two-wheeler vehicle loans, which plummeted by 34.5 percent yoy to Rp 2.19 trillion in 2019. Aside from the rise of ride-hailing apps, Jahja also attributed the nosedive to last year’s slumping purchasing power as well as fierce competition in motorcycle financing.

“Our fiercest competitor are finance companies owned by motorcycle manufacturers, and we admit that we haven’t become a top-of-mind name in the segment,” he said.

Across all segments, BCA booked 9.5 percent growth in outstanding loans to Rp 603.74 trillion in 2019, supported by double-digit growth from the corporate segment and the commercial and small and medium enterprises (SMEs) segment. That compares with 6.08 percent growth in the overall commercial banking industry last year.