Minibus licence prices plummet to between HK$500,000 – HK$700,000, vehicles repossessed by banks

Chow Kwok-keung, Chairman of The Hong Kong Taxi and Public Light Bus Association Ltd.

22nd February 2024 – (Hong Kong) In recent months, Hong Kong’s minibus industry has been hit hard by a significant decline in passenger demand, causing a sharp drop in license prices. The prices of minibus licences, which were valued at around HK$2 million at the end of 2020, have plummeted to approximately HK$500,000 to HK$700,000. This unprecedented decline has led to a dire situation for minibus owners, with some being forced to abandon their vehicles, which are subsequently impounded by banks seeking to recover outstanding loans.

According to Chow Kwok-keung, Chairman of The Hong Kong Taxi and Public Light Bus Association Ltd, banks have not actively demanded early repayment from minibus owners. However, some owners have failed to meet their hire-purchase loan obligations, resulting in their vehicles being repossessed. Over the past three years, approximately 100 minivans, predominantly red minibuses, have been towed away, while there are around 1,000 red minibuses in operation throughout Hong Kong. This trend is attributed to the relatively stable business of green minibuses, which operate on designated routes.

Chow emphasised that the minibus industry has faced stagnant business conditions for many years, with no improvements following the opening of the border with mainland China. He attributed the industry’s struggles to a lack of government policy support. Without intervention or assistance measures from the government, the number of minivans being repossessed is expected to continue to rise. To address this crisis, Chow proposed that authorities engage in discussions with industry stakeholders to approve additional routes for minibus operators, such as those serving Eastern Tsuen Wan, Ma Wan, and Tseung Kwan O. Furthermore, he suggested assisting minibus operators in transitioning to routes within the Greater Bay Area.

The situation has become increasingly challenging for minibus owners, many of whom find themselves unable to meet their financial obligations. Representatives from Minibus Collections, an online platform, have highlighted the difficulties faced by the industry, leading some owners to be unable to afford their vehicles. In order to alleviate the burden of loan repayments, some owners have renegotiated their mortgages to reduce monthly instalments. Operators who previously ran green minibuses have recounted experiences where their vehicles were used as collateral during loan applications. During the license renewal process, certain bank managers have demanded early loan repayments or advanced payments for future instalments, forcing some owners to consider selling their properties to meet these demands. While banks generally prefer owners to continue making repayments to avoid depriving them of their livelihoods, those unable to meet their financial obligations are advised to engage in discussions with their respective banks to explore alternative arrangements.

The Hong Kong Taxi and Public Light Bus Association Ltd issued notice to its members that banks have not actively demanded early repayment from minibus owners.