Automotive Financing Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Automotive Financing Market has been segmented by Type (New Vehicle and Used Vehicle), Source Type (OEMs, Banks, Credit Union, and Financial Institutions), Vehicle Type (Passenger Cars and Commercial Vehicle), and Geography (North America, Europe, Asia-Pacific, and Rest of the world). The report offers market size and forecasts for Automotive Financing in terms of value (USD billion) for all the above segments.

Market Snapshot

automotive financing market
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: North America
Largest Market: Asia-Pacific
CAGR: >6 %

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Market Overview

The Automotive Financing Market was valued at USD 220 billion in 2021 and is expected to reach USD 320 billion by 2027, registering a CAGR of 6% during the forecast period (2022-2027).

Amid the COVID-19 pandemic, the global demand for new vehicles and used vehicles witnessed a significant slump for 2020, as manufacturing and sales activities were halted for several months in the first half. This, in turn, hampered the automotive financing market for the year 2020. However, since the latter half of the year, the demand for vehicles witnessed significant growth, which fueled the automotive financing market and is expected to continue during the forecast period.

Meanwhile, the COVID-19 pandemic has augmented the growth of online and digital channels for business-to-consumer purchases. In reply to these trends, OEMs and industry players have started to virtualize their dealerships or agreements and operate remotely.

Furthermore, excessive investments in autonomous vehicles and prompt financing from dealers, banks, and credit unions are further contributing to the growth of the global automotive financing market. Asia-Pacific Region is expected to lead the market, followed by North America and Europe. Asia-Pacific Region is expected to offer several growth opportunities to market vendors during the forecast period.

Scope of the Report

The Automotive Financing Market has been segmented by Type (New Vehicle and Used Vehicle), Source Type (OEMs, Banks, Credit Union, and Financial Institutions), Vehicle Type (Passenger Cars and Commercial Vehicles), and Geography (North America, Europe, Asia Pacific and Rest of the world). The report offers market size and forecasts for Automotive Financing in terms of value (USD billion) for all the above segments.

Type
New Vehicle
Used Vehicle
Source Type
OEMs
Banks
Credit Unions
Financial Institutions
Vehicle Type
Passenger Cars
Commercial Vehicles
Geography
North America
United States
Canada
Rest of North America
Europe
Germany
United Kingdom
France
Rest of Europe
Asia-Pacific
China
Japan
India
South Korea
Rest of Asia-Pacific
Rest of the World
South America
Middle-East and Africa

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Key Market Trends

Rise In Cab Service Financing And Autonomous Vehicles

The technological upgradation in automobiles is thereby uplifting its demand, and hence this industry is enhancing its customer base at an extensive rate. Furthermore, excessive investments in autonomous vehicles along with prompt financing from dealers, banks, and credit unions further contribute to the growth of the global automotive financing market.

The rise in cab service financing is driving the global automotive financing market as the objective of cab service financing is to create a financing program that offers flexible leases, weekly rentals, and discounts for the purchase of new cars to potential drivers.

Also, the growing investments in autonomous vehicles positively impact the global automotive financing market growth. Autonomous vehicles provide drivers convenience and safety, encouraging several end-users to invest in R&D activities. The investments in autonomous vehicles require financing from banks, credit unions, and dealers, which also increases the demand for automotive financing. The rise in cab service financing coupled with the increasing investments in autonomous vehicles is expected to drive the automotive financing market growth during the forecast period.

Features such as safety and convenience provided by the autonomous vehicles to the drivers and increased financial cab services motivate the users to invest in the research and development activities in the automotive domain. Furthermore, to invest in autonomous vehicles, the end users require financing from a credit union, dealers, and banks that further bolster the need for automotive financing and are anticipated to drive the growth of the global automotive financing market.

Automotive Financing Market_trend 1

Asia-Pacific Leading the Automotive Financing Market

The automotive financing market has already matured in industrialized nations. However, there are untapped opportunities in developing countries, where the market has extremely low penetration. One of the chief reasons for low automobile sales in African countries is the unavailability of options for finance. Further, the growth of electric vehicles across Asia-Pacific countries is also anticipated to remain a major driving factor for the market growth. For instance, sales of battery electric vehicles in China in 2021 stood at 2.9 million units, which was significantly higher compared to that of 1.1 million units sold in the year 2020. Also, to encourage the adoption of electric vehicles, governing bodies across Asia-Pacific are focusing on the ease of availability of financing, which will aid the market growth during the forecast period.

Asia-Pacific is expected to emerge as the fastest-growing regional market over the forecast period. The growing number of favorable government initiatives in economies such as India, Japan, and China, to promote growth in the automotive industry and maintain consumer interest is expected to create growth opportunities for the regional market growth.

Automotive Financing Market _Geography

Competitive Landscape

The Automotive financing market is fragmented and is in the growth phase. Competition is expected to intensify by the end of the forecast period because of lucrative opportunities available to various players in the market. The key vendors in the market are focusing on mergers and acquisition activities to increase their market share and expand their regional base.

Recent Developments

  • In March 2022, Santander Consumer USA Inc. (a subsidiary of Santander Holdings USA, Inc.) partnered with AutoFi Inc. to develop a digital car buying solution for the former company. This solution will include mobile, desktop, and in-dealership tools that will help find cars within consumer budget, streamline the financing process, and allow customers to procure vehicles as per their requirements.
  • In March 2022, CIG Motors partnered with Polaris Bank Limited to provide automotive financing solutions across Nigeria.
  • In January 2021, Volkswagen Finance Pvt. Ltd. (VWFPL)India increased its shareholding in Chennai-based KUWY Technology Service Pvt Ltd. (KWY) by picking up a majority stake in the latter to offer value-added services to its customers through digital platforms. This acquisition focus is mainly on reducing the loan processing time, making it a win-win situation for dealers and customers.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Driver

    2. 4.2 Market Restraint

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Type

      1. 5.1.1 New Vehicle

      2. 5.1.2 Used Vehicle

    2. 5.2 Source Type

      1. 5.2.1 OEMs

      2. 5.2.2 Banks

      3. 5.2.3 Credit Unions

      4. 5.2.4 Financial Institutions

    3. 5.3 Vehicle Type

      1. 5.3.1 Passenger Cars

      2. 5.3.2 Commercial Vehicles

    4. 5.4 Geography

      1. 5.4.1 North America

        1. 5.4.1.1 United States

        2. 5.4.1.2 Canada

        3. 5.4.1.3 Rest of North America

      2. 5.4.2 Europe

        1. 5.4.2.1 Germany

        2. 5.4.2.2 United Kingdom

        3. 5.4.2.3 France

        4. 5.4.2.4 Rest of Europe

      3. 5.4.3 Asia-Pacific

        1. 5.4.3.1 China

        2. 5.4.3.2 Japan

        3. 5.4.3.3 India

        4. 5.4.3.4 South Korea

        5. 5.4.3.5 Rest of Asia-Pacific

      4. 5.4.4 Rest of the World

        1. 5.4.4.1 South America

        2. 5.4.4.2 Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles*

      1. 6.2.1 Bank of America Corporation

      2. 6.2.2 Ally Financial Inc

      3. 6.2.3 Hitachi Capital Asia Pacific Pte. Ltd.

      4. 6.2.4 HSBC Holdings plc

      5. 6.2.5 HDFC Bank Limited

      6. 6.2.6 ICBC (Industrial and Commercial Bank of India)

      7. 6.2.7 Bank of China

      8. 6.2.8 Capital One Financial Corporation

      9. 6.2.9 Wells Fargo & Co

      10. 6.2.10 Toyota Financial Services

      11. 6.2.11 BNP Paribas SA

      12. 6.2.12 Volkswagen AG

      13. 6.2.13 Mercedes-Benz Financial Services (Daimler AG

      14. 6.2.14 Standard Bank Group Ltd

      15. 6.2.15 Mahindra Finance

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Automotive Financing Market market is studied from 2018 - 2027.

The Automotive Financing Market is growing at a CAGR of >6% over the next 5 years.

The Automotive Financing Market is valued at 220 Billion USD in 2018.

The Automotive Financing Market is valued at 320 Billion USD in 2027.

North America is growing at the highest CAGR over 2021- 2026.

Asia-Pacific holds highest share in 2021.

Bank of America Corporation, Ally Financial Inc, Hitachi Capital Asia Pacific Pte. Ltd., Toyota Financial Services, Capital One Financial Corporation are the major companies operating in Automotive Financing Market.

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