Car Finance Market
Car Finance Market (Car Type: New Car and Used Car; Finance Type: Lease and Loan; Provider: OEM/Captives, Commercial Banks, and NBFCs) - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2020 - 2030
Press Release :
Car Finance Companies Lean Toward Digital Lending Tools and Platforms to Streamline Process
The car finance market has experienced considerable developments in the past decade, primarily driven by new business models, rising competition, and the onset of new technologies. The fluctuating sales of automotive vehicles across the world continue to define the course of the global car finance market. The sales of new cars across the world have witnessed a slight decline due to a host of demographic, technical, and economic factors since 2017. In addition, as the inventory of used cars continues to grow, the demand for new cars is decreasing. In addition, amidst the growing environmental concerns and calls to minimize carbon emission, car-pooling, the usage of electric bikes and bicycles has increased across the urban regions of the world. Current trends also indicate that more number of consumers are opting to purchase second-hand cars due to surging prices of new automotive cars due to which, the banking sector around the world is paying more attention to second-hand car financing.
Players operating in the current car finance market are increasingly focusing on simplifying the car finance process and make it customer friendly. In addition, market players are also expected to cater to the growing consumer demand for simpler loan applications and swift credit decisions. Advancements in car finance technologies in the past few years are expected to address these challenges due to which, the car finance market is expected to witness steady growth during the forecast period. The entry of cloud-based lending models and portfolio optimization is driven by data analytics that are expected to play an imperative role in the expansion of the car finance market. At the back of these factors, the global car finance market is expected to attain a market value of ~US$ 3 Trn by the end of 2030.
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Focus on Improving Lending Experience and Portfolio Optimization to Propel Market
Advancements in cloud technology are expected to trigger the growth of the global car finance market during the assessment period. As consumer demand for a hassle-free lending experience continues to grow at a rapid pace, stakeholders in the car finance market are projected to leverage cloud technology to cater to these demands. Some of the potential benefits of deploying cloud include swift implementation, cost savings, and efficient delivery of new functions– an important factor that is anticipated to improve the overall lending experience. Cloud-based lending solutions are gradually making inroads in the global car finance market and as per current trends, the market share of on-premise legacy lending systems is projected to decline over the course of the forecast period.
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Another significant development within the car finance market is the optimization of the loan portfolio. As data analytics continues to glide through the automotive space, stakeholders operating in the car finance market are increasingly relying on data analytics software to detect the trends and consumer patterns across the lending process of various portfolios. While automotive companies have utilized data for several years for optimum maintenance, data analytics is likely to establish a strong presence in the car finance market during the forecast period. Market participants are increasingly leaning toward using data analytics software to enhance customer experience and streamline the overall data governance structures.
Car Finance Companies Focus on Refinancing and Extensions amid COVID-19 Crisis
The COVID-19 pandemic has put the brakes on the growth of several industries worldwide and the car finance market is treading through a similar path. Players operating in the current car finance market landscape are estimated to address various challenges, including dwindling consumer confidence and declining sales of new cars in the upcoming years to establish a strong foothold in the market. Due to the unpredicted turn of events, car sales around the world are likely to witness a major slump in 2020 and potentially, the first half of 2021. In their bid to establish a substantial market share, market players are expected to focus on servicing activities, such as refinancing and extensions by leveraging digital tools to accelerate the process remotely. Several companies are also expected to offer payment relief such as deferred lease payments and extensions to existing borrowers that are affected by the COVID-19 virus. Companies are projected to switch to digital lending solutions to ensure business continuity during the ongoing health crisis.
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The global car finance market is expected to grow at a steady pace during the forecast period. The market growth is driven by advancements in technology pertaining to the cloud and data analysis. A large number of car finance companies will rely on digital lending platforms during the ongoing COVID-19 pandemic and possibly, in the period beyond that. Digital tools will play a key role in the restructuring of the car finance market over the course of the forecast period. Market participants should focus on improving the overall lending experience and work toward simplifying the borrowing process for customers.
Car Finance Market: Overview
- The global car finance market is anticipated to expand at a CAGR of ~4% during the forecast period, owing to increase in car sales and rise in penetration of car finance in developing countries
- Car finance is a mature market in developed nations and it is expanding rapidly in developing countries such as China, India, Brazil, and Mexico. Car finance has become an effective means to avail car ownership/usage without paying outright capital, which in turn is helping boost mobility demand among low-income communities.
Car Finance Market: Key Drivers
- The millennial generation has entered the workforce and is gaining economic stability and purchasing power. Millennials are first-time buyers and exhibit higher preference for auto loans and lease as compared to that for direct cash purchase. Rise in the number of car consumers among millennials and generation Z is projected to boost the car finance market.
- Developing countries such as China, India, Mexico, and Brazil are recording high sales of new cars, and rising penetration of financed new cars among total cars sold are anticipated to drive the global car finance market
- Increase in awareness among consumers regarding car finance options in developing countries and lucrative offers such as low interest rate EMIs and zero down payment are anticipated to drive the car finance market. Diversification of automakers into financial services and aggressive marketing through dealership have been pivotal in driving the global car finance market.
Car Finance Market: Major Challenges
- The coronavirus pandemic is likely to cause a global recession with a high impact on the auto sector
- Lower credit bearing capacity of banks and financial institutions is expected to negatively impact the roll out of newer lease contracts and thereby, restrain the car leasing market globally.
Car Finance: Market Segmentation
- Based on car type, the new car type held a leading share of the global car leasing market. The penetration of car finance is higher in new car sales, and there is high preference for loan/lease among consumers. Used car financing is gaining popularity and its share is expected to rise during the forecast period.
- Based on product type, the loan segment held a major share of the global car finance market. Car loans are the traditional method of car finance and is a widely preferred means of car ownership. Car leasing is expanding rapidly in Europe and North America and has gained a significant share of the car finance market in these regions. Car leasing is gaining popularity in China, India, and other countries in Asia. The market is anticipated to expand significantly during the period, owing to changing consumer preference from car ownership to car-as-a-service.
- Based on provider, the car leasing market has been split into OEM/captives, commercial banks, and NBFCs. The commercial banks segment accounted for a notable share of the global car finance market, as commercial banks have traditionally been loan providers and key industry participants. The OEM Captives segment is projected to expand considerably in the near future, as automakers penetrate the car finance and service industry with a vision on diversification.
Car Leasing Market: Regional Analysis
- Based on region, the global car finance market has been segregated into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa
- North America led the global car finance market during 2018 as a majority of consumers availed car financing solutions. The U.S. and Canada are mature markets for car finance. Furthermore, car purchases in these regions are majorly financed by car loans. North America is followed by Europe with U.K., Germany, France, and Russia holding notable share of the market in Europe. The market in Asia Pacific is estimated to expand at a significant pace, owing to expansion of economies in the region, increase in consumer purchase parity, and entry of captives in car finance in the region.
- Latin America and Middle East & Africa held a relatively minor share of the global market; however, the market in these regions is projected to expand considerably during the period, owing to significant expansion of the market in Mexico and Brazil
Car Finance Market: Competition Landscape
- Key players operating in the global car finance market include
- BNP Paribas
- Bank of China
- Alley Financial Inc.
- Bank of America
- ALD Automotive
- Hitachi Capital Asia Pacific
- Ford Motor Credit,
- Standard Bank Group Ltd,
- Volkswagen Financial Services
Car Finance Market – Scope of the Report
Transparency Market Research’s recent report on the car finance market, with the help of a comprehensive outlook, provides readers with an assessment of the global market landscape. This study on the car finance market analyzes the scenario for the period of 2018 to 2030, wherein 2019 is the base year and 2018 and before is historical data. This report enables readers to make important decisions with regard to their business, with the help of a wealth of information enclosed in the study.
This TMR study on the car finance market also provides data on the developments made by important players and stakeholders in the market, along with a competitive analysis. The report also provides an understanding of the strengths, weaknesses, threats, and opportunities, along with the trends and restraints in the landscape. Presented in a clear sanctioned manner, this report on the car finance market gives readers an individual understanding of the market.
This study also discusses the underlying trends and impact of various factors that are driving the car finance market, along with their influence on the evolution of the market.
This study also offers Porter’s Five Point Analysis, value chain analysis, regulatory scenario, and a SWOT analysis of the car finance market, in order to elaborate the crucial growth tactics and opportunities for market players contributing to the market.
Key Questions Answered in This Report on Car Finance Market
- How much value will the car finance market generate by the end of the forecast period?
- Which segment of the market is likely to have the maximum market share by 2030?
- What are the impact factors and there effects on the market for car finance?
- What regions currently contribute the maximum share to the overall car finance market?
- What are the indicators expected to drive the car finance market?
- What region is likely to be a lucrative market during the forecast period?
- What are the essential strategies by key stakeholders in the car finance market to expand their geographic presence?
- What are the major advancements witnessed in the car finance market?
- How regulatory norms affected the market for car finance market?
This report answers these questions and more about the car finance market, aiding major stakeholders and key players in making the right decisions and strategizing for the advancement of their business.
Car Finance Market: Research Methodology
This TMR report on the car finance market is based on a complete and comprehensive evaluation of the market, backed by secondary and primary sources. The competitive scenario of the car finance market is supported by an assessment of the different factors that influence the market on a minute and granular level. By thoroughly analyzing the historical data, current trends and announcement by the key players, researchers of the car finance market arrive at predictions and estimations, and calculate the forecast for the market.
This report uses an analytical triangulation method to estimate the numbers and figures of the car finance market, with both a bottom-up and top-down approach.
This detailed assessment of the car finance market, along with an overview of the landscape, is provided based on a careful examination of the avenues related to this industry. Analysts’ conclusions on how the car finance market is estimated to expand are based on carefully vetted primary and secondary sources.
Car Finance Market – Segmentation
This report on the car finance market provides information on the basis of car type, finance type, provider, and region.
Middle East & Africa