; Automotive Finance Market Size, Industry Share, Analysis, Forecast, 2032

Automotive Finance Market

Automotive Finance Market: By Provider Type (Banks, OEMs, Other Financial Institutions), By Vehicle Type (Passenger Cars, Commercial Vehicles), By Finance Type (Direct, Indirect), By Purpose Type (Loan, Lease, Others), And Region - Global Analysis of Market Size, Share & Trends For 2021-2022 And Forecasts To 2032

Published on: Jan-2023
Report Code: FG AU 01348
No. of Pages: 170 - 350
Report Format: PDF

[170+ Pages Research Report] Automotive Finance Market to surpass USD 531.1 billion by 2032  from USD 251.6 billion in 2021  at a CAGR of 7.0%  throughout the forecast period 2022-32

Product Overview

Automotive finance simply means a loan taken for a vehicle, which the borrower gradually pays back. When a borrower obtains an auto loan, he consents to repay the loan amount plus interest and any associated costs within a predetermined time frame. A person may save a lot of money on interest and fees by shopping around and comparing loan options. When someone finances a vehicle, a financial institution loans him the cash he requires to purchase the vehicle. In exchange, the borrower gives the lender the money to borrow over a set number of months apart from paying interest and sometimes fees. Banks, credit unions, finance businesses, online lenders, and some vehicle dealerships are the common sources of car financing.

Market Highlights

The Automotive Finance Market is expected to project a notable CAGR of 7.0% in 2032.

Automotive Finance Market to surpass USD 531.1 billion by 2032 from USD 251.6 billion in 2021 at a CAGR of 7.0% in the coming years, i.e., 2022-32. One of the key reasons anticipated to fuel the growth of the Automotive Finance Market is the rising global demand for electric automobiles. To improve offerings, some suppliers of automotive technology implement cryptocurrency-based payments. Hence, the Automotive Finance Market is anticipated to be driven by cryptocurrency's rising prominence in the sector.

Figure - Market Analysis of Automotive Finance Market


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Automotive Finance Market: Segments

The OEMs segment is expected to grow with a higher CAGR during 2022-32

Automotive Finance Market is categorized on the basis of Provider Type into Banks, OEMs, and Other Financial Institutions. The Bank segment dominated the Automotive Finance Market in the past years. Over the projected period, the OEMs segment is expected to see a higher CAGR and is currently the fastest-growing market sector. OEMs operate and manage captive finance companies as independent entities that lend and lease money to customers. To acquire more outstanding customer shares, OEMs make enticing offers including longer service terms, buyback offers, and low credit rates.

The Lease segment is expected to grow with a higher CAGR during 2022-32

Automotive Finance Market is categorized on the basis of Purpose Type into Loan, Lease, and Others. Over the projected period, the lease segment is projected to expand the fastest. Leasing a car is a practical way to get a car without making major financial sacrifices. Customers who lease a car can do so for a certain number of months at a fixed monthly cost. Along with insurance, the lender is responsible for paying for vehicle upkeep. As a result, it significantly lowers the costs associated with after-purchase. Moreover, leasing makes it possible for clients to upgrade or change their cars without any fuss.

Figure - Market Analysis of Global Automotive Finance Market


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Market Dynamics

Growth Drivers

The Growing Trust of Customers for Banks and Emergence of Online Loan Services

The online loan services technology has significantly disrupted this market to a great extent. The web- and mobile-based platforms make it simple to contrast, explore, and apply for loan services. The need for automobile finance services is being driven by rising vehicle prices. Although the market for car financing in industrialized nations is largely saturated, developing nations are expected to become the attractive target market for financing firms. Customers in developing nations, however, have more faith in banks than in financial institutions when it comes to such loans. As a result, the Automotive Finance Market will expand as a direct result of growing auto sales.

Increasing Use of Artificial Intelligence in the Automotive Finance Sector

The Automobile Financing Market is using artificial intelligence technology more and more to streamline the approval process, analyze data, boost credit underwriting, and accurately anticipate whether an applicant will become overdue. A number of automotive artificial intelligence technology firms are working to create lending platforms that use AI. This program has financing capabilities that are AI-enabled, allowing lenders to enhance the consumer experience.

Restraint

The Growing Competition in the Market is a Challenge for New Players to Gain Customers

The market has a wide range of competitors, including captives, banks, OEMs, and financial institutions. Due to the intense competition, it is extremely difficult for these businesses to attract new clients while also raising operating and marketing costs. The two main elements need to succeed in this market are open financing procedures and lower interest rates. Since well-known players have already dominated this industry, new entrants are facing obstacles to strengthen their presence.

Recent Developments
  • Car Now, a digital retailer for the automobile sector, revealed in March 2022 that it has joined forces with Cion Digital, a blockchain orchestration platform. Through this collaboration, Car Now will provide quick and compliant crypto payment and financing solutions to auto dealers.
  • Maruti introduced its online platform for providing customers with car financing options in July 2021. Customers can select the best loan package and financial partner through Maruti Suzuki Smart Finance, as well as finish all loan-related paperwork and get money online.
  • Upstart, a prominent AI financing platform, announced the release of Upstart Auto Retail software in October 2021. The AI-enabled financing features of this software allow lenders to enhance the consumer experience.

Automotive Finance Market: Key Players
  • Wells Fargo

Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis

  • HSBC
  • Bank of America
  • Santander Group
  • HDFC Bank
  • Capital One
  • Volkswagen Financial Services
  • Ally Financial
  • GM Financial Inc.
  • Ford Motor Credit Company
  • Toyota Financial Services
  • Honda Financial Services
  • Bajaj Auto Finance
  • Novuna
  • Chase Auto Finance
  • Other Prominent Players

Automotive Finance Market: Regions

Automotive Finance Market is segmented based on regional analysis into five major regions: North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. In 2021, the Automotive Finance Market was dominated by Europe, which also contributed significantly to worldwide revenue. The growth of the regional Automotive Finance Market can be ascribed to the region's abundance of automotive loan service providers.

During the projection period, the Asia Pacific regional market is anticipated to develop at the fastest rate. It is anticipated that the rising number of supportive government measures in nations like Japan, China, and India to support consumer interest and automotive sector growth would open up new growth prospects for the local market.


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Impact of Covid-19 on Automotive Finance Market

During the first quarter of 2020, the COVID-19 pandemic's outbreak had a negative effect on the automobile finance sector. Sales of pickup trucks and light commercial vehicles were particularly strong during the year. According to some estimates, as compared to 2019, the demand for both used and new vehicles decreased by 1-2% and 3-4%, respectively, in 2020.

Automotive Finance Market is further segmented by region into:
  • North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
  • Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
  • Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
  • Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
  • Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

Automotive Finance Market report also contains analysis on:

Automotive Finance Market Segments:

  • By Provider Type 
    • Banks
    • OEMs
    • Other Financial Institutions
  • By Vehicle Type 
    • Passenger Cars
    • Commercial Vehicles
  • By Finance Type 
    • Direct
    • Indirect
  • By Purpose Type
    • Loan
    • Lease
    • Others 
  • Automotive Finance Market Dynamics
  • Automotive Finance Market Size
  • Supply & Demand
  • Current Trends/Issues/Challenges
  • Competition & Companies Involved in the Market
  • Value Chain of the Market
  • Market Drivers and Restraints

Automotive Finance Market Report Scope and Segmentation

Report Attribute

Details

Market Size Value in 2021

USD 251.6 billion

Revenue Forecast in 2032

USD 531.1 billion

Growth Rate

CAGR of 7.0% from 2022 to 2032

Base Year for Estimation

2021

Quantitative Units

Revenue in USD billion and CAGR from 2022 to 2032

Report Coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments Covered

Provider Type,  Vehicle Type,  Finance Type,  Purpose Type, and Region

Regional Scope

North America, Europe, Asia Pacific, Latin America, Middle East & Africa (MEA)

Key Companies Profiled

Wells Fargo, HSBC, Bank of America, Santander Group, HDFC Bank, Capital One, Volkswagen Financial Services, Ally Financial, GM Financial Inc., Ford Motor Credit Company, Toyota Financial Services, Honda Financial Services, Bajaj Auto Finance, Novuna, Chase Auto Finance, and Other Prominent Players.

Frequently Asked Questions (FAQ):

The Automotive Finance Market size was estimated at USD 251.6 billion in 2021 and is expected to reach USD 531.1 billion in 2032.

Automotive finance simply means a loan taken for a vehicle, which the borrower gradually pays back. When a borrower obtains an auto loan, he consents to repay the loan amount plus interest and any associated costs within a predetermined time frame.

The OEMs and Lease segments accounted for the larger share of the Automotive Finance Market.

Key players in the Automotive Finance Market are Wells Fargo, HSBC, Bank of America, Santander Group, HDFC Bank, Capital One, Volkswagen Financial Services, Ally Financial, GM Financial Inc., Ford Motor Credit Company, Toyota Financial Services, Honda Financial Services, Bajaj Auto Finance, Novuna, Chase Auto Finance, and Other Prominent Players.

The major drivers of the Automotive Finance Market are the rising global demand for electric automobiles and the rising prominence of cryptocurrency in the sector.

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