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Vietnam Auto Finance Market is Driven by Growing Purchasing Power of the Middle Class, Lower Interest Rates Charged and Improved Transport Infrastructure: Ken Research Analysis

Vietnam Auto Finance Market Is Driven By Growing Purchasing Power Of The Middle Class, Lower Interest Rates Charged And Improved Transport Infrastructure: Ken Research Analysis

The report titled “Vietnam Auto Finance Market Outlook to 2023 – by Loan Tenure, by Type of Institution (Commercial Banks and Non- Banking Financial Institutions) and by Type of Vehicle (Passenger and Commercial)Ken Research suggested a growth at a CAGR of close to 26% on the basis of credit disbursed in the Vietnam Auto Finance Market during 2018-2023.

Vietnam auto finance market has been identified at a growth stage with a growing appetite for passenger and commercial vehicles. The auto loan outstanding has grown at a CAGR of close to 30% during 2012-2018. The market is highly fragmented with fierce competition among auto financing institutions. Majority of credit institutions are located in Hanoi and Ho Chi Minh City, in the northern and southern regions of the Vietnam, being the financial and economical hubs of the country. The banks and consumer financing companies are projected to develop their presence in the tier 2 cities of the country such as Hai Phong, Da Nang and Bien Hoa as to expand their customer base. The customers which take hire purchase loans in Vietnam include retail or small scale customers and institutional or large scale customers. The loans are used for personal purpose; commercial activities industrial use, pick up and drop services, public transport and others. This sector has been driven by a stable and growing economy, increasing purchasing power of the middle class, improvements in infrastructure and lower auto lending rates. The average interest rate of the auto finance market for the year 2017 has been recorded at 7.4% per annum. The major restraining factors of the market have been low geographical presence, high non performing loans, increasing price competition, and high operating costs as a result of digitalization.

Global taxi services such as Uber and Grab entered Vietnam in 2014 and have since continued to expand their operations, increasing the number of commercial vehicles financed from 2014-2018. The customer base has increased due to the good quality of service, comfortable journey and cheaper price as compared to Vietnam’s local traditional taxis. There have been 21,000 registered cars in Ho Chi Minh City (Saigon) for Uber and Grab as of 2017. The interest charged is 7.6% per annum as of 2018, much lower as compared to 2012, which was at 13.5% per annum. The lowering of interest rates has enabled a higher segment of the population to be able to afford auto loans, adding to the growing market.

The Vietnamese economy has grown at CAGR of 9% during 2013-2018. The economy has flourished with Foreign Direct Investments (FDI) as the driving force, accounting for 70% of Vietnam’s exports according to the International Monetary Fund (IMF) as of 2017. This is due to Vietnam’s geographical location as well as its political and social stability, leading to increasing number of manufacturers entering the country. The middle class of Vietnam has rapidly developed during the review period. There are an increasing number of customers buying a passenger vehicle due to its status symbol and added comfort as compared to motorbikes. The government has focused on improving infrastructure throughout the country to be better able to handle the surge in passenger vehicle owners. The urban development project in collaboration with the world bank took place during 2002-2014 has been successful in constructing 243 km of new or rehabilitated primary and secondary access roads in Vietnam. The government has also constructed numerous highways in country resulting in higher traffic capacity and lower accident rates. These improvements have enticed customers to purchase increasing amounts of passenger and commercial vehicles. All these factors have together pushed the market forward.

Keywords:-

Vietnam Auto Finance Market

Vietnam Auto Finance Industry

Vietnam Auto Credit Disbursed

Vietnam Auto Loan Outstanding

Vietnam Auto Loan Market

Vietnam Car Finance Ecosystem

Vietnam Auto Loan Analysis

Vietnam Auto Loan Disbursed

Vietnam Car Loan Trends

Vietnam Auto Loan Institutions

Vietnam Car Loan Market Forecast

Major Players Auto Finance

Loan Sale Purchase Vietnam

Auto Loan Outstanding Vietnam

Loan Outstanding Vietnam

New Car Finances Vietnam

Old Car Finance Vietnam

Leasing Market Vietnam

Auto Leasing Market Vietnam

Bank Auto Finance Vietnam

Non Bank Institutes Vietnam

Motorbike Loan Vietnam

Truck Loan Vietnam

Vietnam Tien Phong Bank

Vietnam Vietcombank Auto Finance

Vietnam Agribank Auto Finance

Vietnam Vietinbank Auto Finance

Vietnam Saigon Hanoi Bank Auto Finance

Vietnam Techcombank Auto Finance

Key Segments Covered:-

By Type of Vehicles (Passenger Vehicles and Commercial Vehicles on the basis of Credit Disbursed and Auto Loan Outstanding)

By Type of Institutions (Banks & Subsidiaries and Non Bank Financial Institutes on the Basis of Auto Loan Outstanding)

By Loan Tenure (1 Year, 2 Years, 3 Years, 4 Years, 5 and More years on the basis of Auto Loan Outstanding)

Key Target Audience:-

Existing Auto Finance Companies

Banks & Subsidiaries

Captive Finance Companies

Non Banking Financial Institutions

New Market Entrants

Automobile Financing Companies

Government Organizations

Investors

Automobile Associations

Automobile Original Equipment Manufacturer

Time Period Captured in the Report:-

Financial Year 2013-2018: Historical Period

Financial Year 2019-2023: Future Forecast

Key Target Audience:-

Existing Auto Finance Companies

New market entrants

Government bodies

Investors

Automobile Manufacturers

Automobile Associations

Auto parts Equipment Manufacturer

Companies Cited in the Report:-

Banks & Subsidiaries

Tien Phong Bank

Vietcombank

Agribank

Vietinbank

Shinhan Bank Vietnam

Saigon Hanoi Bank

Techcombank

Bank for Investment and Development of Vietnam

Vietnam international bank

Non-Banking Financial Institutions:-

FE Credit

Cement Finance Joint Stock Company

EVN Finance Joint Stock Company

Handico Finance Joint Stock Company

HD Saison Finance Company

Home Credit Vietnam Finance Company Limited

JACCS International Vietnam Finance Company Limited

Maritime Bank Finance Company Limited

MB Shinsei Finance Limited Liability Company

Mirae Asset Finance Company (Vietnam) Limited

Post and Telecommunication Finance Company Limited

Prudential Vietnam Finance Company Limited

SHBank Finance Company Limited

Technological and Commercial Finance Company Limited

Toyota Financial Services Vietnam Company Limited

Vietnam Shipbuilding Finance Company Limited

To know more, click on the link below:-

https://www.kenresearch.com/banking-financial-services-and-insurance/loans-and-advances/vietnam-auto-finance-market/180197-93.html

Related Reports By Ken Research:-

https://www.kenresearch.com/banking-financial-services-and-insurance/loans-and-advances/indonesia-car-finance-market/142267-93.html

https://www.kenresearch.com/banking-financial-services-and-insurance/loans-and-advances/saudi-arabia-car-finance-market/125720-93.html

https://www.kenresearch.com/banking-financial-services-and-insurance/loans-and-advances/egypt-car-finance-market/124560-93.html

https://www.kenresearch.com/banking-financial-services-and-insurance/loans-and-advances/india-car-finance-market-report/679-93.html

Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
[email protected]
+91-9015378249



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Vietnam Auto Finance Market is Driven by Growing Purchasing Power of the Middle Class, Lower Interest Rates Charged and Improved Transport Infrastructure: Ken Research Analysis

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