Market Research Report
Automotive Financing Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
|Published by||Mordor Intelligence Pvt Ltd||Product code||544371|
|Published||Content info||90 Pages
Delivery time: 2-3 business days
|Automotive Financing Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)|
|Published: May 13, 2021||Content info: 90 Pages||
The Automotive Financing Market was valued at USD 232.09 billion in 2020 and is expected to reach USD 394.1 billion by 2026 registering a CAGR of around 6% during the forecast period (2021 - 2026).
The coronavirus pandemic is causing disruption and economic hardship around the globe with factory closures, supply chain disruptions, lockdowns diminishing the demand creating a difficult situation for financing companies to survive during the pandemic. However, the market is expected to grow at a significant level during the forecast period as companies are offering streamlined and simple online financing environments to their customers.
The economic uncertainty has forced car buyers to postpone their purchase of a new vehicle. Despite the slowdown in car sales, auto lenders will have to accommodate an upsurge in servicing activity, such as refinancing and extensions. Auto lenders are adopting digital tools to expedite the service processes remotely.
However, 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.Some of the other factors propelling the growth of market are heavy R&D investments from numerous end users in autonomous vehicles attributing majority stake in market during forecast period.
Furthermore, excessive investments in autonomous vehicles along with prompt financing from dealers, banks and credit unions are further contributing towards the growth of global automotive financing market. Asia Pacific Region expected to lead the market followed by North America and Europe. Asia Pacific Region expected to offer several growth opportunities to market vendors during the forecast period.
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 extensive rate. Furthermore, excessive investments in autonomous vehicles along with prompt financing from dealers, banks and credit unions are further contributing towards the growth of 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. The increase in cab service financing is leading to the growth of automotive financing market.
Also, the growing investments in autonomous vehicles are positively impacting the global automotive financing market growth. Autonomous vehicles provide convenience and safety to the drivers, which encourages several end-users to invest in R&D activities. The investments in autonomous vehicles require financing from banks, credit unions, and dealers, which in turn, increases the demand for automotive financing as well. The rise in cab service financing coupled with the increasing investments in autonomous vehicles is driving the automotive financing market growth during the forecast period.
Due to features such as safety and convenience provided by the autonomous vehicles to the drivers and increased financial cab services motivates the users to invest in the research and development activities in automotive domain. Furthermore, in order to invest in autonomous vehicles, the end users require financing from credit union, dealers and banks that further bolster the need of automotive financing and anticipated to drive the growth of global automotive financing market.
Asia-Pacific Leading the Automotive Financing Market
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 maintaining consumer interest is expected to create growth opportunities for the regional market growth. The region is witnessing an increasing sale of vehicles catering the demand of people. This, as a result, is expected to drive the regional market growth.
Rapidly growing economies of Asia Pacific, where car financing remains a relatively new concept. Banks must get used to structuring loan terms, and captives must get to grips with high entry costs and the need for important market education.
The automotive financing market is led by Asia-Pacific, followed by North America and Europe. The loan market for second-hand cars is expected to grow at a faster pace, on account of increased demand from Asia-Pacific. The premium car segment has been witnessing fast growth over the past few years with customers opting for luxury brands (owing to low loan interest rates, improved standard of living, and people perceiving luxury cars to be a status symbol) expected to register strong sales.
The regional market growth can be attributed to the presence of a large number of automotive finance service providers in the region. Numerous market players in the market are focusing on offering their services through mobile and online channels. This initiative is giving these players an edge over traditional players.
The Automotive financing market is fragmented and is in the growth phase . Competition is expected to intensify by the end of the forecast period (2021 - 2026) because of lucrative oppurtunities available to various players in market. The key vendors in the market are focusing on mergers and acquisition activities to increase their market share and expand their regional base.For instance,