The global auto finance market was valued at USD 250 Billion in 2022 and is projected to grow to USD 400 Billion by 2027, growing at a robust CAGR from 2022 to 2027.  

Amid the COVID-19 pandemic, the global demand for new vehicles and used vehicles witnessed a significant slump in 2020, as manufacturing and sales activities were halted for several months in the first half of the year. However, since the latter half of the year, the demand for vehicles has witnessed significant growth, which has fueled the automotive financing market and is expected to continue to fuel the market during the forecast period.

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1. More than 10 million electric cars were on the world’s roads in 2022 with battery-electric models, driving the expansion of auto finance further

After a decade of rapid growth, in 2022 the global electric car stock hit the 10 million mark, a 43% increase over 2019, and representing a 1% stock share. Battery electric vehicles (BEVs) accounted for two-thirds of new electric car registrations and two-thirds of the stock in 2022. China, with 4.5 million electric cars, has the largest fleet, though in 2022 Europe had the largest annual increase to reach 3.2 million. With the rapid expansion of electric vehicles in the automotive sector, the Auto Finance Industry is projected to further see new heights.

2. The car finance sector has been prepared for change for a long time. Could this be the time at last?

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Trends show that consumers will increasingly complete the entire automotive purchase online. About 92% of the population research cars online before making a purchase. By putting all the information online, they are empowering consumers with innovative mobility and transparent financing alternatives. Technology is redefining the automotive sales and finance landscapes. The evolution of such mobility and financing options coupled with increasing regulatory oversight, operational risk management, and consumer expectations are dramatically changing the rules of the road, forcing industry participants to redefine and adapt to their business approaches.

3. Backed by the digitalization of processes in the Auto Finance Sector, Ally Financial is the major player in the Auto finance market

Ally is one of the largest car finance companies in the U.S., providing car financing and leasing for 4.5 million customers and originating 1.4 million car loans annually. The company has sold more than 5 million vehicles, including 270,000 vehicles sold in 2019 via its Smart Auction online marketplace for auto auctions, launched in 2000. Moreover, the digitalization of processes, lowering interest rates, and high geographical presence are a few key reasons behind the company’s success.

4. What is keeping the auto finance market at the forefront? Major collaborations between the Auto finance companies are driving the market further

The auto financing department of Volkswagen AG as well as Ford Motor Company has announced plans to rescind offering credit to new customers and dealers in India. Other deal includes the Mitsubishi UFJ Lease and Finance merging with Hitachi Capital. The companies are planning to expand their operations on a global level to increase their market share. Moreover, Mahindra Financial Services has acquired 58.2% of Sri Lanka-based Ideal Finance with investments worth millions.

For more insights on the market intelligence, refer to the link below:-

Global Auto Finance Market

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The post Global Auto Finance Industry set to Skyrocket to $400 Bn by 2027 – is the Industry prepared to Blast off to New heights or will it encounter Turbulence? : Ken Research appeared first on Ken Research.