Automotive Financing Market Outlook 2031
The Global Automotive Financing Market size was valued at USD 261.46 Billion in 2022 and is likely reach to USD 458.90 Billion by 2031, expanding at a CAGR of 6.45% during the forecast period, 2023–2031. The growth of the market is attributed to the reaction towards macroeconomic changes, shifting customer spending behavior, and new regulation for environment sustainability the auto-financing sector has evolved.
The goal of car finance firms is to give cash to customers who want to buy or lease a personal or commercial vehicle. Technical advancements and increasing mobility has shoot up the demands and leads to expanding the industries client base at a rapid pace. Excessive expenditures in autonomous vehicles, as well as quick financing from dealers, banks, and credit unions, are driving the market.
Governments throughout the world are increasing their expenditures in EV charging stations and hydrogen fueling stations, as well as providing incentives to purchasers. This has led to a growing demand for electric vehicles in the market and creating immense opportunities for automotive financing companies.
EV sales in India, excluding E-rickshaws, increased by 20% to 1.56 lakh units in FY20, driven mostly by two-wheelers. According to the NITI Aayog and the rocky mountain institute (RMI), India's EV finance market is expected to reach Rs. 3.7 lakh crore (US$ 50 billion) during forecast period.
According to statistics from the China Banking Association, the current consumer vehicle finance penetration rate in China is close to 50%, whereas the average penetration rate in countries with more established auto financing sectors is over 70%.
Market Trends, Drivers, Restraints, and Opportunities
- Electrification of transportation and increasing demand for electric vehicles are anticipated to drive the market in coming years.
- Companies launching new generation vehicle with advance features are anticipated to surge the market.
- Growing financial inclusion in rural areas is expected to boost the market during the forecast period.
- Developments of road, highways, and national highways leads to increased connectivity are expected to fuel the market during the forecast period.
- Rapid growth of the car rental market is key factors fueling the market in the coming years.
- Rising bad debts due to non-repayments act as a key challenge that can hamper the market growth.
- Rising inflation and increasing number of job loss are expected to hinder the market.
- Digitalization and low interest rates are projected to create lucrative opportunities for the market players.
Scope of Automotive Financing Market Report
The report on the global automotive financing market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Automotive Financing Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Source Types (Banks, Credit Union, OEMs, and Financial Institutions), Type (New Car and Used Car), Vehicle Type (Commercial Vehicle and Passenger Cars), Purpose Type (Loan and Lease)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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Ally Financial Inc.; Hitachi Capital Asia Pacific Pte. Ltd.; Bank of America Corporation; Toyota Financial Services; Capital One Financial Corporation
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Automotive Financing Market Segment Insights
The banks segment is projected to constitute a key market share
Based on application types, the automotive financing market is divided into banks, credit union, OEMS, and financial institutions. The banks segment is expected to account for a key share of the market during the forecast period owing to low interest rates and due to regularization of banks by regulatory bodies bringing trust for banks as a lender.
The new car segment is expected to expand at a rapid pace
In terms of types, the automotive financing market is segmented into new car and used car. The new car segment is expected to hold a key share of the market in the coming years due to increased demand for new generation vehicles which are power efficient and best in class performance.
The passenger cars segment is anticipated to expand at a high CAGR
On the basis of vehicle types, the automotive financing market is segregated into commercial vehicle and passenger cars. The passenger cars segment is expected to constitute a key share of the market during the forecast period owing to increasing disposable income, improving life style, and desire to own a car.
The loan segment is projected to hold a key market share
Based on purpose type, the automotive financing market is divided into loan and lease. The loan segment is expected to represent a key share of the market during the forecast period owing to it gives a right and feel of owing a car to the buyer. Moreover, paperless or minimal documentation finance and low interest rates are making loan more accessible to large population.
Automotive Financing Market Regional Outlook
Asia Pacific is anticipated to dominate the market
On the basis of regions, the automotive financing market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is anticipated to dominate the market during the forecast period. The growth of market is attributed to increasing income and rising spending in countries such as India, China, and Japan also rapid growth of automotive industry in the region.
Segments
Application Types
- Banks
- Credit Union
- OEMs
- Financial Institutions
Type
Vehicle Type
- Commercial Vehicle
- Passenger Cars
Purpose Type
Regions
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
Competitive Landscape
Key players competing in the automotive financing market include Ally Financial Inc.; Hitachi Capital Asia Pacific Pte. Ltd.; Bank of America Corporation; Toyota Financial Services; and Capital One Financial Corporation.
Some of these players coming up with several strategies such as mergers, acquisitions, partnerships, collaborations, capacity expansion, and product launch to increase/enhance their market shares.
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