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Automotive Finance and Leasing for Consumers in the Asia-Pacific Region delivers comprehensive and in-depth research covering the USD 266.0 billion market for private car finance in ten countries in the Asia-Pacific region, namely: China, India, Indonesia, Japan, Malaysia, the Philippines, South Korea, Taiwan, Thailand and Vietnam. A Chinese version of the report abstract can be found here. Based on a survey of 680 dealers in these countries and an investigation typically covering around 30 manufacturer brands in each territory (although as many as 76 in China), the study delivers unique insights into the market for finance and leasing for new and used passenger cars bought by consumers, with fully comparable and standardised data describing market values and volumes.

Table Of Contents

Automotive Finance and Leasing for Consumers in the Asia-Pacific Region
0.0 EXECUTIVE SUMMARY 1
New car sales rose by a compound annual rate of more than 10% between 2009 and 2013… 2
…with the fastest growth rates recorded in Indonesia and Thailand 2
China hosts the largest automotive finance and leasing market in the region by volume of contracts… 2
…and its share of the regional market by value is twice that of Japan 4
For new cars, take-up rates for finance and leasing average more than 60% across the region… 4
…and are highest for both new and used cars in Malaysia 4
In India, Maruti Suzuki has more than 30 recognised external finance partners 5
Under 5% of dealers in the Philippines and Vietnam rely solely on manufacturers' tied providers 6
China Construction Bank has the largest potential customer base in the region… 6
…while SAIC group has ownership stakes in the leading captive finance providers 6
Toyota has established captive or joint venture finance operations in all ten countries 7
Hyundai is planning to buy the equity stake of GE Capital in Hyundai Capital Services 7
1.0 INTRODUCTION 9
What is this report about? 9
The focus of the report is on finance and leasing related to the sale of passenger cars to individuals 9
Rationale 9
The provision of financial services is essential to support both car sales and profitability 9
This report offers a unique analysis of the subject in the Asia-Pacific region based on primary research 9
Methodology 9
Survey of dealers and manufacturers 9
Market data 13
Computation of market data is based on a variety of inputs including the results of the dealer survey 13
External sources 13
Definitions 14
Finance and leasing products 14
Operating models 15
Tied and non-tied providers 16
Abbreviations 16
Exchange rates 16
Graphical analyses 16
PartnerBASE and market data annexe 17
Finaccord 17
2.0 REGIONAL OVERVIEW 19
Passenger vehicle data 19
Car parc 19
There are more than 200 million passenger cars registered in the Asia-Pacific region… 19
…and two thirds of the growth recorded since 2009 has come from China alone 19
New car sales to individuals 20
New car sales rose by a compound annual rate of more than 10% between 2009 and 2013… 20
…with the fastest growth rates recorded in Indonesia and Thailand 20
New car sales in China have been fundamental to growth in the wider Asia-Pacific region 21
Used car sales 23
Japan hosts the largest used car market in the region… 23
…followed by China, India, South Korea and Indonesia 23
Sales by manufacturer groups 26
Across the ten countries Toyota group is the leading manufacturer group… 26
…with five joint ventures based in China featuring in the top ten 26
Finance and leasing 29
Survey of automotive dealers 29
Virtually all dealers offer finance and leasing products to buyers of new and used cars 29
On average, dealers in India work with the most finance and leasing providers… 30
…while half or more of dealers in Taiwan and Vietnam work with non-tied providers only 31
Where offered, the take-up rate for finance and leasing with new cars is always 40% or more… 33
…and stands at more than 75% in two countries 33
Nine out of ten used cars bought in Malaysia are financed at the point of sale 33
Types of finance and leasing product sold by dealers 35
Simple loans with no option to return the car at the end of the contract make up around 60% of the total… 35
…and exceed 90% in China, Indonesia and Taiwan 36
Financial leasing is dominant in two countries through hire purchase contracts 36
Manufacturer brand survey results 39
On a weighted basis, virtually all manufacturer brands have an endorsed scheme in Japan and Thailand… 39
…and manufacturer brand involvement seems to have increased substantially in recent years 39
Captive finance providers are used by over a third of manufacturer brands… 41
…while more than 40% of manufacturer brands in India use more than one external finance provider 41
Joint venture finance providers are most common in China and Malaysia 41
Market size 44
China and Japan make up nearly two thirds of the region's finance and leasing market by volume… 44
…though Japan has the larger market for direct lending 45
Point-of-sale finance for used cars is significant in Malaysia, the Philippines, South Korea and Taiwan 45
Japan's regional market share by value is reduced because of cheap 'kei' cars and used cars 47
Around 27% of the total regional market value is attributable to direct lending… 48
… but point-of-sale finance is growing far more rapidly… 50
… especially for new cars 51
At a regional level, the value of point-of-sale finance more than doubled between 2009 and 2013 52
Point-of-sale finance for new cars represents around 65% of the total regional market value 53
Competitor dynamics 54
The top 15 finance and leasing providers together claim a weighted share of partnerships of around 60%... 54
…and eight of them are China-based banks or manufacturer groups 54
Toyota group operates captive or joint venture finance providers in all ten countries… 54
… and VW group in five of them 55
Non-captive providers that are strong in Europe tend to be peripheral in the Asia-Pacific region 55
3.0 CHINA 57
Introduction 57
Passenger vehicle data 57
Sales of used cars have grown faster than new car sales between 2009 and 2013 57
Joint venture brands and groups are the leading players in the automotive market 59
Consumer automotive finance and leasing market 60
Market size and growth 60
By volume, point-of-sale finance exceeds direct lending for both new and used cars 60
…with the result that the total value of point-of-sale finance is 3.5 times higher than direct lending 61
Types of finance and leasing product 63
One type of product makes up more than three quarters of point-of-sale finance contracts 63
Survey of automotive dealers and manufacturer brands 64
Dealer survey results 64
Two thirds of dealers utilise tied partners either as well as or instead of non-tied providers 64
Manufacturer brand survey results 66
Most manufacturer brands have an arrangement for the provision of finance and leasing services… 66
…and China Construction Bank is the leading non-captive finance partner for these brands 66
BNP Paribas and Santander have both established joint ventures in recent years 66
The Chinese market for finance and leasing is mainly controlled by the major banks 68
4.0 INDIA 69
Introduction 69
Passenger vehicle data 69
Sales of new cars in India have exceeded 2.5 million for the past four years… 69
…but the growth of used car sales has been both more rapid and more consistent 69
Maruti Suzuki occupies a dominant position in the market for new passenger vehicles 71
Consumer automotive finance and leasing market 72
Market size and growth 72
Point-of-sale finance for new cars dominates the automotive finance market… 72
… and has grown quite rapidly since 2009 as a result of increased sales and inflation 73
Types of finance and leasing product 75
The Indian point-of-sale finance market is dominated by simple loans 75
Survey of automotive dealers and manufacturer brands 75
Dealer survey results 75
In a highly fragmented market, only one finance provider claims more than 10% of non-tied partnerships… 75
…with 40 competitors sharing the rest of these partnerships between them 76
Kotak Mahindra Prime generated a pre-tax profit of INR 7.52 billion for the year ending March 2014 76
Manufacturer brand survey results 78
Toyota Financial Services India is the leading captive, ahead of Mahindra and Mahindra Financial Services… 78
…while HDFC Bank, ICICI Bank and State Bank of India are the leading external partners 78
On a combined analysis, HDFC Bank claims the highest implied share of new business… 80
…but with less than 10% of the weighted share of new registrations 80
5.0 INDONESIA 81
Introduction 81
Passenger vehicle data 81
Sales of new cars in Indonesia more than doubled between 2009 and 2013… 81
… with used car sales also advancing at a healthy rate over the same period 81
Japanese manufacturers dominate the Indonesian market for new vehicle sales 83
Consumer automotive finance and leasing market 84
Market size and growth 84
Between 2009 and 2013 there was a surge in the volume of contracts organised at the point of sale… 84
… with even faster growth by value, partly as a result of inflation in car prices 85
Types of finance and leasing product 87
The Indonesian point-of-sale finance market is almost entirely composed of simple loans 87
Survey of automotive dealers and manufacturer brands 88
Dealer survey results 88
Only around 10% of dealers rely solely on their manufacturer brands' tied providers… 88
… with companies owned by Japanese parents among the main non-bank lenders 88
Manufacturer brand survey results 90
Mandiri Tunas Finance has partnerships with brands accounting for three quarters of the market… 90
…while Astra International and Indomobil are major importers with their own captive finance arms 90
CIMB Niaga has numerous partnerships with comparatively small manufacturer brands 90
Astra International and Mandiri Tunas Finance claim the greatest combined share of partnerships 92
6.0 JAPAN 93
Introduction 93
Passenger vehicle data 93
Sales of new cars outgrew used car sales between 2009 and 2013 93
Japanese brands and groups dominate the market for new car sales 95
Consumer automotive finance and leasing market 96
Market size and growth 96
In terms of number of contracts, direct lending exceeds point-of-sale finance for both new and used cars 96
Rising sales volumes are counter-balanced by a declining average value of cars sold 97
Types of finance and leasing product 99
Over two thirds of consumer automotive finance in Japan is oriented to one type of finance product 99
Survey of automotive dealers and manufacturer brands 100
Dealer survey results 100
Over a half of dealers utilise non-tied partners either as well as or instead of tied providers… 100
… among which Orient Corporation is the leader by share of partnerships 100
Manufacturer brand survey results 102
Most manufacturer brands have an arrangement for the provision of finance and leasing services… 102
… with use of captive partners the most frequently occurring operating model… 102
… and the most important by far when measured in terms of weighted share of partnerships 102
Across all types of provider, the leading firm has an implied market share of new business of 25.8% 104
7.0 MALAYSIA 105
Introduction 105
Passenger vehicle data 105
Sales of new cars in Malaysia rose by nearly 20% between 2009 and 2013… 105
…but dealers' sales of used cars have been more volatile 105
Malaysia's domestic manufacturer brands hold over a half of all new car sales 107
Consumer automotive finance and leasing market 108
Market size and growth 108
Point-of-sale finance is very comfortably the dominant method of acquiring new cars… 108
… and it has grown quite rapidly since 2009 as a result of rising take-up rates 109
Types of finance and leasing product 111
The Malaysian point-of-sale finance market splits between standard and Islamic hire purchase 111
Survey of automotive dealers and manufacturer brands 112
Dealer survey results 112
At least 15 providers of finance and leasing work directly with dealers… 112
… and these are mainly the country's major banks… 112
… some of which make public disclosures about the magnitude of their vehicle finance operations 112
Manufacturer brand survey results 114
Both Perodua and Proton work with multiple partners… 114
…giving Toyota Capital Malaysia a significant share of partnerships as the sole tied partner for Toyota 114
On a combined analysis, Maybank claims the highest implied share of new business 116
… in what is likely to be a fairly fragmented market 116
8.0 PHILIPPINES 117
Introduction 117
Passenger vehicle data 117
Sales of new cars in the Philippines exceeded 60,000 for the first time in 2013… 117
…and used car sales have been growing even faster 117
Toyota and Mitsubishi hold over half of the new passenger vehicle market between them 119
Consumer automotive finance and leasing market 120
Market size and growth 120
New cars financed at the point of sale form the largest segment in this market by volume… 120
… and amount to well over half of the market by value 121
Types of finance and leasing product 123
The point-of-sale finance market of the Philippines is dominated by simple loans 123
Survey of automotive dealers and manufacturer brands 123
Dealer survey results 123
At least 20 providers of finance and leasing work directly with dealers… 123
… led by BDO Unibank, PSBank and EastWest Bank 124
Specialist car finance companies are most visible in the used car sector 124
These include Radiowealth Finance Company and Laus Auto Finance 124
Manufacturer brand survey results 126
Toyota Financial Services operates as a joint venture with Metrobank 126
By weighted share of partnerships, Bank of the Philippine Islands is a clear non-captive leader… 126
… although BDO Unibank has the largest number of relationships with manufacturer brands 126
Bank of the Philippine Islands has the highest implied share of new business on a combined analysis… 128
… with the top six competitors likely to account for more than 80% of the total market 128
9.0 SOUTH KOREA 129
Introduction 129
Passenger vehicle data 129
The Korean market for new car sales has slipped back somewhat in recent years… 129
…although volumes in the used car market have moved up substantially 129
Hyundai and Kia are the dominant car manufacturer brands… 131
…although they have lost some ground to fast-growing foreign competitors 131
Consumer automotive finance and leasing market 132
Market size and growth 132
By volume, point-of-sale finance exceeds direct lending for both new and used cars … 132
…and the total value of point-of-sale finance has risen quite markedly since 2009 132
Types of finance and leasing product 134
Instalment finance via simple loans makes up over 60% of point-of-sale contracts 134
Survey of automotive dealers and manufacturer brands 135
Dealer survey results 135
The majority of dealers surveyed in South Korea utilise both tied partners and non-tied partners… 135
… with Hyundai Capital acting as both a tied and non-tied provider 136
Aju Capital enjoys close ties with dealerships selling GM cars 136
Banks and card issuers are challenging the dominance of traditional competitors in this market 136
Manufacturer brand survey results 138
Nearly three quarters of all manufacturer brands have organised finance and leasing services… 138
…with four major European manufacturer groups operating through captive finance arms 138
Hyundai Capital's implied market share of new business exceeds 50% 140
10.0 TAIWAN 141
Introduction 141
Passenger vehicle data 141
Sales of new cars easily outpaced used car sales between 2009 and 2013 141
Toyota is the leading manufacturer group accounting for 30% of new cars sold in 2013 143
Consumer automotive finance and leasing market 144
Market size and growth 144
The volume of contracts organised at the point of sale more than doubled between 2009 and 2013… 144
… with similar growth apparent when this market is measured in value terms 145
Types of finance and leasing product 147
More than 95% of point-of-sale finance in Taiwan is due to one type of finance product 147
Survey of automotive dealers and manufacturer brands 148
Dealer survey results 148
More than a half of the dealers researched utilise non-tied partners to one extent or another… 148
… with Taishin Bank favoured most in this respect 148
Manufacturer brand survey results 150
Most manufacturer brands have an arrangement for the provision of finance and leasing services 150
Ho Ruen is owned jointly by Hotai and Toyota Financial Services 150
The implied combined market share of the leading three providers falls just short of 50% 152
11.0 THAILAND 153
Introduction 153
Passenger vehicle data 153
New car sales more than doubled between 2009 and 2013… 153
…while used cars are still mostly sold outside the dealer channel 154
Honda displaced Toyota as Thailand's leading passenger car manufacturer in 2013 155
Consumer automotive finance and leasing market 156
Market size and growth 156
By volume, direct lending exceeds point-of-sale finance for used cars but not for new cars… 156
…and the total value of point-of-sale finance is vastly higher than that for direct lending 157
Types of finance and leasing product 159
One finance product type makes up more than 90% of point-of-sale finance contracts 159
Survey of automotive dealers and manufacturer brands 160
Dealer survey results 160
Over two thirds of dealers utilise tied partners as well as non-tied providers 160
Non-bank finance companies are marginalised by Thailand's largest banks 161
Manufacturer brand survey results 163
With the exception of one, all manufacturer brands provide finance and leasing services… 163
…and Bank of Ayudhya is the leading non-captive finance partner for these brands 163
The Thai market for finance and leasing is mainly controlled by the major banks 165
12.0 VIETNAM 166
Introduction 166
Passenger vehicle data 166
Trends in new car sales are heavily influenced by taxes imposed on imported vehicles 166
…and reduced taxes on used cars since April 2013 have stimulated this market 167
Toyota sells nearly four times as many new vehicles as the next closest competitor 168
Consumer automotive finance and leasing market 169
Market size and growth 169
Used cars directly financed have seen the best growth by volume… 169
…though new cars financed at the point of sale make up the bulk of the market by value 171
Types of finance and leasing product 173
The point-of-sale finance market of Vietnam is dominated by loans with flexible interest rates 173
Survey of automotive dealers and manufacturer brands 174
Dealer survey results 174
Dealers rarely rely solely on their manufacturer brand's tied provider 174
Vietcombank and TechcomBank hold the most partnerships with dealers 174
…in a highly fragmented market 174
Manufacturer brand survey results 176
Toyota Financial Services dominates tied provider partnerships… 176
…followed by Techcombank 176
Toyota Financial Services has the highest implied share of new business on a combined analysis… 178
… with the top five competitors likely to account for half of the total market 178

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