New Delhi: With softer vehicle demand worldwide, the global auto financing market is predicted to grow at a modest CAGR of 6.7 per cent in the next six years, as per a recent report.
A US-based market research and consulting company Grand View Research in its latest report expects international automotive finance market to reach USD 344.1 billion by 2026. The global automotive finance market size was valued at USD 220.18 billion in 2019.
As the auto industry is embarking on different solutions to sell vehicles, the business of auto financing is also changing rapidly. The business consulting firm highlights that implementation of technologies, such as Artificial Intelligence (AI), blockchain, and business analytics by automotive finance provides had improved the quality of service and level of customer satisfaction,
Amongst the various available means, banks segment generated the highest revenue share in 2019, the report highlighted adding that is expected to expand at a CAGR of 6.3 per cent over the forecast period.”Customers from the major emerging and developed economies prefer government banks and authorized financial institutions for loans and credit, to avoid any risk factor or discrepancy in the transaction process,” Grand View Research mentioned. It further mentioned that direct automotive finance is expected to remain the most adopted method of financing automotive parts over the forecast period, as it is easily accessible through banks.
The leasing segment, however, estimated to register the fastest CAGR over the forecast period owing to the increasing customer preference for owning advanced vehicles with high-tech and enhanced safety features without bearing the complete cost of the vehicle, according to the report. “Automotive finance providers aid customers from emerging economies like China and India to purchase and lease vehicles at affordable prices. This factor is playing a key role in supporting the market growth in the emerging economies,” the report said.
Besides, Grand View Research has also identified some global captive finance companies such as Toyota Motor Credit Corporation, the Ford Motor Credit Company, Daimler Financial Services, and GM Financial who have emerged as prime players in the automotive financing space.[“source=economictimes”]