Major players in the automotive finance market are Ally Financial, Bank of America, Capital One, Chase Auto Finance, Daimler Financial Services, Ford Motor Credit Company, GM Financial Inc., Hitachi Capital, Toyota Financial Services, Volkswagen Financial Services, BNP Paribas, HDFC Bank Limited, Standard Bank Group Ltd., Banco Bradesco SA, Wells Fargo & Co and HSBC Holdings plc.
The global automotive finance market is expected to grow from $248.99 billion in 2022 to $266.65 billion in 2023 at a compound annual growth rate (CAGR) of 7.09%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity prices, and supply chain disruptions, causing inflation across goods and services and affecting many markets across the globe. The automotive finance market is expected to grow to $360.89 billion in 2027 at a CAGR of 7.86%.
The automotive finance market includes revenues earned by entities by providing financial services that are used in purchasing a vehicle, often one of higher value than would otherwise be possible.The market value includes the value of related goods sold by the service provider or included within the service offering.
Only goods and services traded between entities or sold to end consumers are included.
Automotive finance refers to the financial support received to buy a car with a small down payment from pocket. The lender’s loan can be repaid over a certain length of time in equal monthly installments with an agreed-upon interest rate.
Europe was the largest region in the automotive finance market in 2022.Asia-Pacific is expected to be the fastest-growing region in the forecast period.
The regions covered in this report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The main provider types of automotive finance are banks, OEMs, and other provider types.Banks are used to receiving the funds in one go, then paying them back over time, along with interest.
A bank refers to an institution that is authorized to lend money and take deposits from checking and savings accounts.The finance types are direct finance and indirect finance.
The vehicle types include passenger vehicles, commercial vehicles, and other vehicle types.
Increasing vehicle prices are expected to propel the growth of the automotive finance market going forward.Vehicle prices refer to the amount a car manufacturer is willing to demand for creating, producing, and putting a vehicle on the market.
Automotive financing refers to purchasing a car, often a more expensive one than would otherwise be feasible. For instance, in June 2022, according to data shared by Kelly Blue Book, a US-based vehicle valuation and information source company owned by Cox Automotive, average transaction costs for new vehicles climbed by 13.5% year over year, from $41,534 in May 2021 to $47,148 in May 2022. The highest gain ($888) was seen in trucks, with an ATP of $56,216. Vans witnessed a gain of $726 in May, bringing their ATP to $48,671, while SUVs saw an increase of $526, bringing their ATP to $46,073. Therefore, increasing vehicle prices are driving the growth of the automotive finance market.
Technological advancements have emerged as a key trend gaining popularity in the automotive finance market.Major companies operating in the automotive finance market are focused on innovating new technologies to sustain their position in the market.
For instance, in September 2022, Kuwy, an India-based first automotive fintech startup and a subsidiary of Volkswagen Finance, launched KUWY-LaaS, an AI-driven platform with blockchain technology for online auto sales.The technology not only democratises online auto transactions while maintaining complete transparency, but it also offers more information to help the seller, buyer, and lender make the best decisions possible.
The technology enables a customer to choose financing options, select a lender, and receive fast approval in a completely paperless journey.
In May 2022, Protective Life Corporation, a US-based financial service holding company, acquired AUL Corporation for an undisclosed amount.This acquisition enables Protective to provide more solutions, safeguard more clients, and speed up growth.
The product lineup from AUL is a great addition to Protective’s Asset Protection Division. AUL Corporation is a US-based automotive finance and insurance provider.
The countries covered in the automotive finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.