Automotive Finance Industry Overview
The global automotive finance market size is expected to reach USD 451.71 billion by 2030, registering a CAGR of 7.2% from 2022 to 2030, according to a new report by Grand View Research, Inc. Growing global demand for autonomous cars is expected to drive the market growth. Increasing government regulations on rising road safety are creating the need for autonomous cars with highly advanced technologies worldwide.
Automotive Finance Market Segmentation
Grand View Research has segmented the automotive finance market based on the provider type, finance type, purpose type, vehicle type, and region.
Based on the Provider Type Insights, the market is segmented into Banks, OEMs, Other Financial Institutions.
- The banks segment led the market and accounted for more than 57.0% share of the global revenue in 2021. The banks segment growth can be attributed to the fast-processing features with the necessity for least documentation, in addition to the high-reliability features.
- Earlier, banks are used to finance only around 70.0% to 80.0% of the total vehicle price. However, currently, these banks are offering 100% finance for the vehicle, owing to which customers are showing more interest in purchasing a new car, over a used car.
- The OEMs segment is anticipated to register the highest growth over the forecast period. Automotive OEMs provide better after-sales services due to the availability of identical automobile parts, like that of the vehicle financed, for repair or the replacement.
Based on the Type Insights, the market is segmented into Direct, Indirect.
- The direct segment dominated the market and accounted for more than a 56.0% share of the global revenue in 2021.
- Consumers are focusing on determining the financing source, which effectively meets their requirements. Consumers directly apply for car loans at the credit union, banks, and other lending companies.
- Moreover, the customers have complete control over the lending process as this process doesn’t include any third-party salesperson or dealer. In the direct loan process, the consumer requires a large amount of time to choose a suitable lender as compared to the indirect loan process.
- The indirect segment is anticipated to register the highest growth in the forecast period. The most important benefit of this indirect finance type is that it allows customers to take on-site expert advice from independent finance specialists.
Based on the Purpose Type Insights, the market is segmented into Loan, Leasing, Others.
- The loan segment led the market and accounted for more than 59.0% share of the global revenue in 2021. Loans have been a standard process of purchasing an automobile by most of the global population. As the credit environment started to advance, leasing and finance companies had extra funding sources to make accessible to the consumers.
- The leasing segment is anticipated to register the highest growth over the forecast period. The segment growth can be attributed to the increasing number of leasing providers in emerging economies, such as India, China, and Japan. The leasing services are offered for both new as well as used cars.
- Moreover, companies in automobile leasing are enhancing consumer experience and leveraging their profit margins by heavily investing in digitization technologies, such as blockchain.
Based on the Vehicle Type Insights, the market is segmented into Commercial Vehicles, Passenger Vehicles.
- The passenger vehicles segment led the market and accounted for more than 62.0% share of the global revenue, in 2021.
- The segment growth can be attributed to the increasing need for mobility due to the increased distances between work, home, education, leisure, and shopping facilities. The automotive industry is growing due to the constant change in customer needs.
- The need for innovations in safety systems, infotainment systems, advanced driver-assistance systems, telematics, autonomous vehicles, and in-dash controls is increasing, especially in passenger vehicles.
- The commercial vehicles segment is anticipated to witness significant growth during the forecast period. Since, commercial vehicles are expensive in comparison to other vehicles, numerous banks, and financial institutions have introduced reasonable loan schemes, which include simple terms and conditions.
Automotive Finance Regional Outlook
- North America
- Asia Pacific
- Latin America
- Middle East Africa (MEA)
Key Companies Profile Market Share Insights
The market is fragmented in nature. The market is in the growth stage, and also the competition is anticipated to intensify over the forecast period. Prominent players are adopting various strategies, such as partnerships, strategic joint ventures, mergers acquisitions, and geographical expansion, to cement their foothold in the market. The emerging subscription business is altering the market dynamics.
Some prominent players in the global automotive finance market include
- 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
Order a free sample PDF of the Automotive Finance Market Intelligence Study, published by Grand View Research.
About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.
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