Global Automotive Finance Market 2024-2030

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    AUTOMOTIVE FINANCE MARKET

     

    KEY FINDINGS

    1. The Auto Finance Industry is considered to become the next red flag across economies in the world. Falling demand for cars, outbreak of virus forcing people to stay indoors, liquidity crunch and rising job losses indicates that the future of the market is cluttered with a huge number of defaults by the borrowers.
    2. The industry is expected to gain momentum in the Asia-Pacific region in the next decade. However, the current scenario has raised the level of uncertainty as world’s largest auto market ,China is expected to witness a decline of around 15.6% in the auto sales in 2020 while in India , auto loan rejection rates have doubled from 8% to 15% due to the fear of defaults on the part of the borrowers.
    3. Auto finance companies need to revamp their business models post the pandemic. They need to be the provider of the entire mobility solutions to their customers, invest in more product innovations that increase the adoption of electric vehicles, reconsider the change from ownership to rental and subscription-based models and diversify their operations to invest more in other avenues.
    4. Mitsubishi UFJ lease and Finance announced a merger with Hitachi Capital. The companies are planning to expand their operations on a global level to increase their market share. 
    5. The auto financing department of Volkswagen AG as well as Ford Motor company have announced plans to rescind offering credit to new customers and dealers in India.
    6. Octane Lending has raised approximately $52 million in the funding series D in August 2021. The funding has raised the company’s total equity funds over the $192 mark with a valuation of over $900 million.
    7. Southern Auto Finance secured a funding worth $204.5 million in warehouse funding in August 2021. 
    8. Maruti Suzuki India Limited, launched a new online service named Smart Finance for the company’s Arena and Nexa.
    9.  Daimler Truck Financials introduced a finance program for its Western star and Greightliner trucks named Keep the World Moving.
    10. Tata Motors signed an MoU for two years with Jammu & Kashmir bank to provide financing offers to the customers.
    11. Mahindra Financial Services has acquired 58.2% of the Sri Lanka based Ideal Finance with investment worth millions
    12. Volkswagen Finance Pvt. Ltd. , announced the acquisition of the leading digital platform company KUWY Technologies as a majority stake holder.

     

    INTRODUCTION TO AUTOMOTIVE FINANCE MARKET

    Automotive financing or auto financing are services that offer financial products and support to further allow people to purchase vehicles without having to make the complete payment in cash.

     

    Such an arrangement includes the borrowing of money from financial institutions such as banks, credit unions, and dealers or other informal money lenders.

     

    AUTOMOTIVE FINANCE MARKET DYNAMICS

     

    SI No Timeline Company Developments
    1 February 2022 Solera Solera Holdings announced that it has signed a definitive agreement to acquire Spireon.Its strategic acquisition of Spireon will further strengthen its position as a leading provider of AI-powered software, services and data assets to four critical pillars of the vehicle lifecycle, including Vehicle claims,Vehicle repair,Vehicle solutions, Fleet solutions.

     

    2 28 September Keyloop Keyloop Acquires FISC To Integrate Automotive Finance, Expanding Its Offerings For Both Retailers And OEMs

     

    3 July 2021 J.D Power J.D. Power, a global leader in data analytics and consumer intelligence, today announced it has acquired Superior Integrated Solutions, Inc./Darwin Automotive, a leading provider of automotive finance & insurance (F&I) software used by automotive dealerships.

     

    Of all the sectors that escaped the 2008 financial crisis relatively unscathed, auto lending industry was one of them. The cash strapped borrowers continued to prioritise paying off their cars over their homes and credit cards with a simple logic that one can sleep in the car but cannot drive their house to work.

     

    infographic: auto loan market, automotive financing market, Automotive Finance Market, Automotive Finance Market Size, Automotive Finance Market trends and forecast, Automotive Finance Market Risks, Automotive Finance Market report

    However, the USD 1.3 trillion industry which has now become 60 % bigger than it was back then, is under severe pressure due to COVID-19. Not only are millions of people being put out of work, but the government is calling for everyone to stay at home to limit the spread of the virus which raises the question of whether borrowers will continue to put their cars above all when money is tight.

     

    In April 2021, Mitsubishi UFJ lease and Finance announced a merger with Hitachi Capital lease lending company based in Japan.. The companies are planning to expand their operations on a global level to increase their market share. 

     

    The company Shriram Transport Finance which is a non-banking finance provider reported a drop of 46.9% in the net profit of the company that reported the quarter ending in June of 2021.

     

    The drop is attributed by the management of the company towards higher bad loan provisioning. However, some companies such as ACKO, a new technology insurer registered over three times gross revenue for the first quarter of the fiscal year 2021-2022 ending in June 2021. The company reported a gross premium with 120% rise with adoption of digitalisation.

     

    The company Nicholas Financial has recorded a year on year 137% increase in the first quarter of the fiscal year 2021-2022 with direct loan originations to $5.7 million.

     

    The company has reinvested its earnings to amplify company training and expansion in technological innovations and geographical expansions. The indirect originations of the company have also increased by 21% to $20.3 million year on year.

     

    As the global chips and semiconductor shortage has caused low inventory levels in many companies disrupting the manufacturing of vehicles.

     

    Some finance and insurance departments of automotive dealers such as Sonic automotive, Asbury automotive, Lithia Motors and AutoNation have continued to observe high revenue figures in the second quarter of 2021.

     

    For instance, the company Sonic automotives financial department clocked a revenue of $177.3 million which was a significant increase by approximately 60% as compared to the last year.

     

    The company Huntington Auto Finance clocked in $1.9 billion which was a 58% year on year increase after the pandemic stricken year of 2020.

     

    To know more about Global Motor Insurance Market, read our report

     

     

    Sr. No. Timeline Company Updates
    1 September 2021 Kotak Mahindra Group and Volkswagen Finance Pvt Ltd Kotak Mahindra Group acquired the vehicle financing loan portfolio of Volkswagen Finance Pvt Ltd (VWFPL) thus gaining access to over 30,000 customers with a total loan outstanding with VWFPL of around INR 1,340 crore.
    2 August 2021 Honda Cars and Canara Bank Honda Cars India Ltd (HCIL) partnered with Canara Bank facilitating HCIL customers to avail easy financing options and car loans from Canara Bank.
    3 March 2021 Ford and Mahindra Ford Motor and Mahindra & Mahindra ended their partnership according to which Mahindra was to acquire Ford’s operations in India while Ford had to help Mahindra enter several international markets.
    4 June 2020 Mahindra Finance and Maruti Suzuki India Maruti Suzuki India joined hands with Mahindra Finance for vehicle loans as per which, the customers can avail wide options for getting their car financed from Mahindra Finance.
    5 March 2019 BMW Financial Services BMW Financial Services tied up partnerships with Fintech Startups that participated in its “Collaboration Lab” program, including Bloom, carLABS, Motion Auto Insurance, Omniscience, Supermoney, and Wrisk USA, to further develop their ideas alongside leading subject matter experts in the automotive and financial sector.

     

     

    Whether it’s for a car, an RV, a motorcycle, or even a boat, automobile buyers believe that loan applications take too long. This is due to the masses of paperwork that financing or leasing a vehicle necessitates.

     

    Traditional loan origination is time-consuming, does not help either the customer or the lender, and raises the chance of losing a customer before they sign the dotted line.

     

    Customer experience is important in this age of immediate everything. Traditional automobile dealers must assure client satisfaction if they want to keep and develop their customer base. Customers will not wait for a mediocre experience if they don’t have to. 

     

    Smart, digital applications that use a decisioning platform to automatically pull data in. Data collection, risk modelling, and customised pricing are all automated with AI-powered decisioning tools. Online businesses are springing up all over the place, ultimately obliterating the in-person dealership experience.

     

    IMPACT OF COVID-19 ON AUTOMOTIVE FINANCE MARKET

     

    Understanding the nuances of their financing package, including fees and annual percentage rates, is critical in the car-buying process for low- and middle-income consumers who were hit the hardest by the pandemic. 

     

    Families in U.S. cities cannot afford the monthly payment to finance a new car. That transparency is critical because they can figure out if they can afford the automobile and manipulate the figures so they aren’t surprised or disappointed when they go into a dealership to buy a car at the last minute.

     

    CURRENT SCENARIO IN THE AUTOMOTIVE FINANCE MARKET

    The industry that was considered as a buoyant business till 2019 with lending in United Kingdom rising from USD 28 Billion to USD 56.73 Billion from 2012 to 2017, the repayment of such lending now looks uncertain.

     

    OEMs will delay new product launches due to supply chain disruption and lower demand perception, forcing consumers who are relatively less financially impacted to postpone their buying decision.

     

    Social distancing and work-from-home norms will reduce the need to be mobile and hence reduce the demand for cars on the whole. Fleet and rental companies have surplus cars and their demand for new cars will also remain subdued.

     

    But, as all clouds have a silver lining, there is some hope for the industry – we do see a few opportunities shaping up for auto financiers.

     

    Expiring leases present an opportunity for extension or renewal. In an attempt to weather lower fresh sales, offers to incentivize customers will lead to rise in personal contract financing.

     

    infographic: auto loan market, automotive financing market, Automotive Finance Market, Automotive Finance Market Size, Automotive Finance Market trends and forecast, Automotive Finance Market Risks, Automotive Finance Market report

     

    The major players in the industry have introduced continuous investments for the development of the automotive sector and have contributed a wide share in the economic growth of the country.

     

    However, the sector has been affected by the COVID-19 pandemic largely due to the economic instability created because of the halt in the manufacturing as well as travelling activities.

     

    The pandemic has also caused large scale unemployment as well as lowered income for the middle class. This has led people to use up their savings for survival forcing them to push new vehicle purchases. 

     

    Due to the onset of the pandemic financiers are supporting customers during this hardship by introducing longer repayment schemes and lucrative deals.

     

    For example, the company Ford is offering a delay of 90 days for the first payment of the loan for new cars, similar offerings are being made by Nissan as well as Hyundai for loan repayments.

     

    As of July 2021, the auto financing department of Volkswagen AG as well as Ford Motor company have announced plans to rescind offering credit to new customers and dealers in India.

     

    The companies are expected to exit their financing operations from the country. In an attempt to offset the disadvantage created they would offer incentives to customers and dealers who have already been part of their finance department.

     

    The leading powersports fintech Octane Lending has raised approximately $52 million in the funding series D in August 2021. The funding has raised the company’s total equity funds over the $192 mark with a valuation of over $900 million.

     

    The investment funds round was led by the Progressive Investment group as well as investors such as Upper90, Valar Ventures, Contour Venture partners and many more.

     

    infographic: auto loan market, Automotive Finance Market, Automotive Finance Market Size, Automotive Finance Market Trends, Automotive Finance Market Forecast, Automotive Finance Market Risks, Automotive Finance Market Report, Automotive Finance Market Share

     

    A leading finance company, Southern Auto Finance secured a funding worth $204.5 million in warehouse funding in August 2021.

     

    The funding was led by the Capital One and One William Street Capital management group. The funds will provide the lender with lower fund costs and even the potential to enter into the auto asset-backed securities market.

     

    The company Maruti Suzuki India Limited in July 2021, launched a new online service named Smart Finance for the company’s Arena and Nexa. The service will provide end to end financing solutions and services to its customers pan India.

     

    Social distancing standards will drive the need for independent personal mobility. Customers who were using ride-shares and public transportation will likely switch to personal transport. This will increase the demand for cars, specifically the small cost-effective yet fuel-efficient ones.

     

    Other factors that are expected to spur demand include increasing investments in autonomous vehicles, prompt financing from credit unions, dealers, and banks, increase in the use of online services, advancements in blockchain technology, and growing innovation in e-commerce.

     

    infographic: auto loan market, Automotive Finance Market, Automotive Finance Market Size, Automotive Finance Market Trends, Automotive Finance Market Forecast, Automotive Finance Market Risks, Automotive Finance Market Report, Automotive Finance Market Share

     

    Social distancing standards will drive the need for independent personal mobility. Customers who were using ride-shares and public transportation will likely switch to personal transport. This will increase the demand for cars, specifically the small cost-effective yet fuel-efficient ones.

     

    Other factors that are expected to spur demand includes increasing investments in autonomous vehicles prompt financing from credit unions, dealers, and banks, increase in the use of online services, advancements in blockchain technology, and growing innovation in e-commerce.

     

    AUTOMOTIVE FINANCE MARKET SEGMENTATION

     

    1. Based on Provider of Funds

    • Banks
    • Captive Auto Loan Companies

    A captive finance company is a subsidiary entity of a larger corporation that manufactures and sells a product to the general public. In the case of automobiles, a captive finance company offers loans to consumers who want to buy their parent corporation’s vehicles.

    Examples include General Motor Acceptance Corporation, Ford Motor Credit Company

    • Credit Unions

    A credit union is not affiliated to a specific auto company. In such a case,loans are given to the members of the credit union at attractive interest rates

    • Other Financial Institutions

    Includes Cooperative Banks , NBFC etc.

     

     

    1. Based on the Type of Finance

    • Direct Finance

    A direct auto loan is when one applies for a car loan at a bank, credit union or other lending company

    • Indirect Finance

    An indirect auto loan is financing that one gets through the automotive dealer, their lending partners or another financial institution.

     

    AUTOMOTIVE FINANCE MARKET SIZE AND FORECAST

    Estimates indicate that global auto sales are expected to decline by 22% this year to 70.3 million units led by 26.6% in the US to 12.5 million units as compared to a year ago.

     

    In China which is world’s largest auto market, sales are expected to decline by 15.6% while in Europe a drop of around 13.6 million units is expected. Such numbers indicate the level of downturn which is expected to be faced by automotive finance companies across the world.

     

    infographic: auto loan market, Automotive Finance Market, Automotive Finance Market Size, Automotive Finance Market Trends, Automotive Finance Market Forecast, Automotive Finance Market Risks, Automotive Finance Market Report, Automotive Finance Market Share

     

    The market in the European region is changing rapidly with the introduction of electric vehicles, autonomous and connected vehicles which also foster the growth of the finance sector.

     

    The auto finance companies in such a developing phase are gaining momentum including both the independent loan providers as well as the capitalists. The countries dominating the market for promising future growth are France, UK and Germany.

     

    The customers with long-term debts which include home loans have become challenging for the automotive finance providers to lend loans which has hindered the growth of the market.

     

    Countries such as India, Australia, Japan as well as China have higher demand for finances and loans for vehicles, which has increased the offerings for repayment of loan to longer durations from 12 months to 3 years and even 4 years.

     

    The growth of the market in the Asia-Pacific region is estimated to be higher than other regions and has upcoming opportunities for the industry in the near future.

     

    The North American market is growing at a slower pace because of the economic disruptions created by the COVID-19 pandemic causing the instability.

     

    However, the Latin American region as well as the African and Middle-Easten market are witnessing substantial growth rate as the demand for vehicles is growing in these regions.

     

    Moody ‘s also highlighted the potential impact of car dealership closures during the crisis on the car manufacturer finance houses, which provides billions in funding to car dealerships to buy their stock.

     

    For Example, the finance arm of Volkswagen Group, the world’s largest car manufacturer, owed around USD 27.34 billion from dealerships till the end of 2019.

     

    Asia-Pacific is expected to have considerable market growth due to the increasing number of favourable government initiatives, especially in India, China, and Japan, to maintain consumer interest and promote growth in the automotive industry.

     

    The global automotive finance market size is estimated at $XX billion in 2020 growing at –% CAGR till 2026

     

    AUTOMOTIVE FINANCE MARKET RECENT LAUNCH

    MG Motor India has launched MG e-Pay, a one-stop online car finance platform that provides an end-to-end online automobile financing journey with rapid loan approvals. MG e-Pay is created with the goal of providing customers with clear and convenient online car purchase solutions.

     

    Customers will be able to get flexible, seamless, transparent, and speedy loan approvals from the comfort of their own homes. Under the MG e-Pay program, MG has partnered with ICICI Bank, HDFC Bank, Kotak Mahindra Prime, and Axis Bank to provide personalized and quick financing solutions.

     

    In just 5 clicks and 6 simple steps, MG e-Pay will streamline the client’s buying journey.Customers can now reserve MG cars online or at their local MG Dealership, customizing their vehicles with accessories, merchandise, and protection plans, among other things. Customers can also apply for pre-approved loans.

     

    A leading artificial intelligence (AI) lending platform, Upstart, recently unveiled Upstart Auto Retail software, which includes financing that is supported by AI. Both consumers and dealerships may benefit from a better car-buying experience thanks to the cloud-based technology. This new software will offer access to Upstart-powered vehicle loans for the first time.

     

    Another illustration of how Alviere’s embedded financial services platform may assist brands in transforming consumer relationships from one-dimensional, one-off events into ongoing, deep, value-driven engagements is AutoPayPlus. 

     

    Alviere anticipates working with clients in the automotive industry to provide a quick time-to-market and simple path for offering new financial services to both current and potential customers without having to do any of the grunt work associated with being a financial services provider.

     

    With the launch of NGage, a new, web-based electronic point-of-sale system, Toyota and Lexus dealers across the UK are making the process of financing a car purchase for clients faster and simpler.

     

    Customers can choose the package that’s best for them using the features offered by NGage, and once they’re satisfied with the details, they can use an electronic signature to approve the loan arrangement. With the right interest rates, quotes can be compared side by side, and financing approval can be acquired very instantly.

     

    At the quotation and agreement stages, the procedure does away with the need for paper papers, which also helps to avoid delays that may arise when documents must be physically signed and returned.

     

    In order to give clients more options, Freedom Finance, an award-winning integrated lending and digital lending marketplace, is happy to announce the debut of an enhanced vehicle finance solution. Consumers will embark on a customised vehicle financing journey that enables Freedom Lending to better understand their requirements and offer customers more precise auto finance solutions that are suitable for their unique situations.

     

    Freedom Finance is now able to offer Personal Contract Purchase (PCP) alongside existing Hire Purchase (HP) and auto loan options, significantly expanding its product line, thanks to the additional information it has collected to deliver this personalised service.

     

    Customers may view their prior searches through a standalone section on the myfreedom website and use the new, simplified customer journey to quickly, easily, and safely identify the best auto-finance choices for them. Before completing the full application form, users are encouraged to compare the differences between PCP, HP, and auto loan packages using the calculator that is part of the updates.

     

    To make this market-leading auto loan offer more accessible to more automobile customers, all of these services will be made available to embedded finance partners of Freedom Finance, like the RAC.

     

    The National Automobile Dealers Association (NADA) Show in Las Vegas will include the introduction of Solera Auto Finance by Solera Holdings, LLC (“Solera”), the industry pioneer in vehicle lifecycle management. At the help of Solera Auto Finance, franchise and independent dealers will be able to offer auto loans with low rates to a wide range of potential used car customers.

     

    With the addition of a new competitive financing option, Solera Auto Finance enhances its Dealer Management Systems (DMS), which include iDMS for independent dealers and Auto/Mate for franchise dealers.

     

    Georgia, Indiana, Kentucky, North Carolina, Oklahoma, Virginia, and Washington will be the first states where Solera Auto Finance will be available. In the near future, Solera wants to add more than a dozen new states.

     

    AUTOMOTIVE FINANCE MARKET UPCOMING TRENDS

     

    MOBILITY AS A SERVICE WILL DRIVE GROWTH AND PROFITABILITY

    Mobility services are exploding in popularity, especially on well-known ride sharing platforms. It is estimated that that annual revenue from such mobility services could soar up to trillions in 2030.

    The auto finance industry should respond to such change with a range of strategies to better own the customer relationship in this new space, simplifying the payments ecosystem, and partner with (or compete with) start-ups moving into the space.

     

    EMERGENCE OF BLOCK CHAIN TECHNOLOGY

    Insurers and banks are piloting a variety of blockchain-powered financing solutions, and auto captive lenders are serving as test-beds for manufacturer blockchains.

     

    The most exciting prospects include putting the vehicle on a blockchain to support for insurance, fraud detection and floorplan financing, and using blockchain to turn the vehicle into a mobile wallet.

     

    ARTIFICIAL INTELLIGENCE WILL OPEN NEW AVENUES FOR GENERATING SALES

    It has traditionally been understood that banks would know more about the customer while the manufacturer’s captive lender would know more about the vehicle.

     

    That is now changing, as AI enable banks and fintech lenders to tap new sources of consumer data for predictive insights. For example, these systems can use advanced analytics to predict which vehicle options a consumer may want with surprising accuracy.

     

    EMERGENCE OF NEW BUSINESS MODELS

     

    One payment, one vehicle and one party has been the traditional model in the auto finance sector. However, with the emergence of   the subscription model, in which consumers pays a flat fee for access to the car of their choice, and the shared ownership model, in which a single vehicle is owned by more than one person, the landscape is changing. These models could help keep vehicles affordable as technology features increase manufacturing and maintenance costs

     

     This probably means a smaller market for auto sales. Dealers will need to decide if they build a mobility service, consolidate and attempt to compete at scale or pick another path to profitability in order to ensure their survival in the long run.

     

    Sr. No. Timeline Company Updates
    1 December 2021 Axis Auto Finance Axis Auto Finance launched a direct-to-consumer website in a move to overcome inventory constraints and increase the lender’s digital footprint.
    2 July 2021 Maruti Finance Maruti Suzuki launched Maruti Suzuki Smart Finance for its ARENA and NEXA customers. Under the initiative, the digital platform will provide customers end-to-end online car financing solutions.
    3 October 2020 Honda Financial Services General Motors Company and Honda Motor Co Ltd launched Blockchain-Based Electric vehicle charging network
    4 March 2020 Toyota Financial Services Corporation Toyota Motor Corporation and Toyota Financial Services Corporation revealed a “cross-group virtual organization” known as Toyota Blockchain Lab to explore applications of blockchain within the auto industry.

     

    INNOVATION

     

    The Emergence of Real-World Assets in the DeFi field.The field of decentralised finance (DeFi) is developing quickly. For digital assets, new developments are allowing unique use cases and unleashing liquidity. The growth of tokenized real-world assets is one of the most encouraging trends. Investors now have access to assets like real estate, art, and other collectibles that were formerly impossible to obtain or exchange.

     

    Real-world assets are represented on the blockchain through the process of tokenization. Illiquid assets can be made transferable round-the-clock on international secondary markets by releasing digital tokens that reflect ownership or a share in an asset. Investors may develop diverse portfolios that include real-world and digital assets by purchasing and selling fractional ownership of various assets.Real-world assets that have been tokenized provide DeFi with a completely new design area for lending, trading, and yield-generating protocols.

     

    DeFi can attain size and sustainability by using resources worth billions of dollars that are found in the real world. Users get access to fresh trading and income opportunities from assets they are familiar with and confident in. Overall, by linking the physical and digital worlds, tokenized real-world assets have the potential to completely change DeFi.

     

    This emerging field has a promising future.Real-world assets (RWA) that have been tokenized are a fresh opportunity for decentralised finance (DeFi). RWAs might have a substantial influence on the DeFi ecosystem if they are tokenized and included into DeFi protocols.

     

    Liquidity increased. RWAs that have been tokenized would increase the liquidity of DeFi lending protocols and exchanges. Investors can swiftly enter and exit holdings without having to go through a drawn-out selling procedure. Because of this, institutional investors and high-net-worth people seeking to diversify their portfolios find RWA tokens to be appealing.

     

    In DeFi lending protocols, RWAs like real estate, commodities, and infrastructure can be utilised as collateral. This lowers the risk for the lenders while increasing the funding options for the borrowers. For instance, a property owner might obtain a loan without having to sell the property by using it as collateral.A decrease in volatility. Compared to cryptocurrency, RWAs are often less volatile.

     

    Their incorporation in DeFi protocols could aid in lowering the possibility of unexpected price collapses and stabilising interest rates. DeFi is now more appealing to consumers and investors in the mainstream as a result.

     

    Automating ownership of assets. RWAs may be handled and transferred automatically with the use of smart contracts, removing the need for middlemen and facilitating quicker and more effective transactions.

     

     Smart contracts have the ability to be programmed with compliance criteria, guaranteeing that all statutory and regulatory requirements are completed without any problems. This improves openness, lowers mistakes or conflicts, and eventually increases overall effectiveness.

     

    By incorporating real-world assets into DeFi, institutional DeFi can develop, fusing the effectiveness of decentralised finance with legal protections. Institutional DeFi takes care of the AML and KYC procedures, assuring compliance and luring institutional participants looking for better regulatory standards.

     

    By fostering a trustworthy and reliable environment, this convergence encourages further engagement and cooperation between the conventional financial institutions and the blockchain-based DeFi industry.

     

    The traditional real estate market has a long history of exclusivity, illiquidity, high entry barriers, and a difficult buying procedure. Real-World Assets (RWA) have, however, made real estate investment more accessible and affordable thanks to the blockchain ecosystem.

     

    Particularly among millennials, renting has emerged as a preferred option over securing a lengthy mortgage. RWA offers chances for real estate professionals and investors to meet the needs of this market.

     

    With RWA making up around 40% of the market, the tokenization of real estate assets on the blockchain has significantly changed the industry. The real estate industry’s future is being shaped by the move towards digitised assets, including digital land, which is in line with millennials’ changing wants and tastes.

     

    The benefit of fractional ownership, which divides the ownership into several portions, is provided by the tokenization of works of art or collectibles. By increasing accessibility, this fragmentation allows a broader spectrum of investors to take part in the ownership of these assets.

     

    As a result, tokenization improves price transparency and liquidity in the market for fine art and antiques. Even while tokenized real-world assets have a lot of potential for DeFi, there are still big obstacles that get in the way of widespread use.

     

    Fragmentation Even while it’s advantageous for fractionalization, ownership fragmentation might make it more difficult to come to judgements about the asset and establish consensus. It might get harder to reach consensus among token holders when ownership gets more dispersed as a result of tokenization.

     

    Conflicts and disputes might result from this fragmentation, which could have an adverse effect on the asset’s overall stability and value. To preserve the asset’s value and integrity, it is crucial for token holders and other stakeholders to build up efficient governance processes and channels for communication.Inadequate Regulation

     

    Currently, tokenized assets are not heavily regulated. Many conventional investors and businesses refrain from entering the market due to this legal ambiguity. Regulations must be put in place to safeguard investors while promoting innovation.

     

    Advanced Technology To implement and comprehend the technology behind tokenized assets, which might be complicated, specialised expertise is needed. Some people are prevented from developing or investing in these assets by the high entrance barrier. Systems that are easier to understand and utilise must be created for widespread use.

     

     

    AUTOMOTIVE FINANCE MARKET COMPETITIVE LANDSCAPE

     

    SI No Timeline Company Developments
    1 January 2022 Repay Holdings Repay Holdings Corp. (REPAY), a provider of vertically-integrated payment solutions, on Monday announced it has acquired Payix for up to $115 million.REPAY also announced the upsizing of its revolver capacity by $60 million, increasing its existing $125 million revolving credit facility to $185 million
    2 February 2022 TransUnion TransUnion said it has signed a definitive agreement to acquire Verisk Financial Services, the financial services business unit of Verisk, in a $515 million deal.
    3 12 May 2021 Repay Holdings  REPAY made a significant increase in its collections capabilities announcing it has signed a definitive agreement to acquire BillingTree for approximately $503 million.

     

     

    Some of the key players in automotive finance market include Bank of America Corporation, Ford Credit, Ally Financial Inc, Honda Financial Services, Hitachi Capital Asia-Pacific Pte. Ltd., BMW Financial, HSBC Holdings plc, Maruti Finance, HDFC Bank Limited, TATA Motor Finance. ICBC (Industrial and Commercial Bank of India), Volkswagen AG, Bank of China, BNP Paribas SA, Capital One Financial Corporation, Standard Bank Group Ltd, Wells Fargo & Co, Mercedes-Benz Financial Services (Daimler AG) and Toyota Financial Services.

     

    Furthermore, the automotive financing market in Asia Pacific has become highly competitive with an increase in the number of used-car outlets and vehicle showrooms. Moreover, a decline in automotive loan rates in the region is further expected to propel the regional growth.

     

    infographic: auto loan market, Automotive Finance Market, Automotive Finance Market Size, Automotive Finance Market Trends, Automotive Finance Market Forecast, Automotive Finance Market Risks, Automotive Finance Market Report, Automotive Finance Market Share

     

    In May 2021, the company Daimler Truck Financials introduced a finance program for its Western star and Greightliner trucks named Keep the World Moving.

     

    According to the program, delays of up to 120 days are allowed for the first repayment as well as an allowance on the model of up to $5,000. The program is estimated to increase the sales as well as the market share of the company that were decreased due to the pandemic.

     

    The automaker Tata Motors in August 2021, announced a partnership with NBFC Sundaram Finance group to offer vehicle loans for its customers.

     

    The finance group will provide loans for the new range of Forever cars for 6 years with 100% financing. The agreement is also facilitating a special scheme named as the Kisan Car Scheme for farmers to repay their loans, under the scheme farmers can repay in installments every 6 months once. Some of the other partnerships by the Tata group are:

     

    • In July 2021, the company announced partnership with IndusInd Bank. As part of the agreement they will provide financial offers to customers for the company’s Forever range which includes Tata Altroz, Harrier and Nexon. It is a step-up scheme in which the customer chooses to buy from this range with a low EMI special option provided for the first 3-6 months.
    • In July 2021, the company signed an MoU for two years with Jammu & Kashmir bank to provide financing offers to the customers. The offers will be valid on the commercial vehicle range of the company.

     

    The company Mahindra Financial Services has acquired 58.2% of the Sri Lanka based Ideal Finance with investment worth millions. The company has plans to incorporate its business strategy using the customer base of Ideal Finances and creating an effective business model.

     

    The company Volkswagen Finance Pvt. Ltd. in January 2021, announced the acquisition of the leading digital platform company KUWY Technologies as a majority stake holder.

     

    They had already acquired a 25% stake in the firm in September 2019. They are planning to improve the efficiency in the loan process as well as reduce the processing time.

     

    In January 2021, Axis Bank announced partnership with the automaker Hyundai Motor India Ltd. to offer retail financing services in the automotive industry. The agreement is set to provide vehicle loans directly from the company’s Click to buy (CTB) platform.

     

    In December 2020, Daimler’s commercial vehicles division announced partnership with 18 leading financial banks along with NBFCs to offer financing options to its customers.

     

    Japan’s export credit agency, which is state-owned, has agreed to offer Nissan Motor corporation credit up to $2 billion as part of the agreement in order to facilitate sales in the US.

     

    The funds are part of the $4.1 billion credit agreement between Nissan Motor Acceptance Corporation and Japan Bank of International Cooperation.

     

     

    Sr. No. Timeline Company Sales
    1 Q2-2021 (Ending September 2021) Maruti Suzuki Maruti Suzuki disbursed about 100,000 loans valued at Rs 6,500 crore in the past four months through Maruti Suzuki Smart Finance, an online platform offering a real-time car finance service facility to buyers.
    2 FY 2020-2021 Tata Motors Finance The Company financed overall 82,874 units of vehicles as compared to 1,37,911 units in FY 2019-20, registering a decline of 40% YoY. Commercial Vehicle financing contracts declined by 42% to 64,524 units in FY 2020-21 as compared to 1,11,391 units in FY 2019-20. The Passenger vehicle financing contracts too fell by 31% to 18,350 units as compared to 26,520 units in FY 2019-20.
    3 Q2-2021 Ford Credit Ford Credit posted quarterly revenue of $2.6 billion for Q2 2021, or roughly 9.7% of total revenues. This figure was down by 5.0% YOY. Despite that, Ford Credit generated adjusted EBIT of $1.6 billion in Q2 2021, nearly tripling YoY, as it benefited from the rebound in vehicle sales compared to a year earlier.

     

     

    infographic: auto loan market, Automotive Finance Market, Automotive Finance Market Size, Automotive Finance Market Trends, Automotive Finance Market Forecast, Automotive Finance Market Risks, Automotive Finance Market Report, Automotive Finance Market Share

     

     

    THIS AUTOMOTIVE FINANCE MARKET REPORT WILL ANSWER FOLLOWING QUESTIONS

    1. Automotive Finance Market Size and Forecast, by region, by application
    2. Average B-2-B price for Automotive Finance Market, by region, per user
    3. Technology trends and related opportunities for new Automotive Finance Market tech suppliers
    4. Automotive Finance Market share of leading vendors, by region,
    5. Coronavirus impact on Automotive Finance Market earnings
    Sl no Topic
    1 Market Segmentation
    2 Scope of the report
    3 Abbreviations
    4 Research Methodology
    5 Executive Summary
    6 Introduction
    7 Insights from Industry stakeholders
    8 Cost breakdown of Product by sub-components and average profit margin
    9 Disruptive innovation in the Industry
    10 Technology trends in the Industry
    11 Consumer trends in the industry
    12 Recent Production Milestones
    13 Component Manufacturing in US, EU and China
    14 COVID-19 impact on overall market
    15 COVID-19 impact on Production of components
    16 COVID-19 impact on Point of sale
    17 Market Segmentation, Dynamics and Forecast by Geography, 2024-2030
    18 Market Segmentation, Dynamics and Forecast by Product Type, 2024-2030
    19 Market Segmentation, Dynamics and Forecast by Application, 2024-2030
    20 Market Segmentation, Dynamics and Forecast by End use, 2024-2030
    21 Product installation rate by OEM, 2023
    22 Incline/Decline in Average B-2-B selling price in past 5 years
    23 Competition from substitute products
    24 Gross margin and average profitability of suppliers
    25 New product development in past 12 months
    26 M&A in past 12 months
    27 Growth strategy of leading players
    28 Market share of vendors, 2023
    29 Company Profiles
    30 Unmet needs and opportunity for new suppliers
    31 Conclusion
    32 Appendix
     
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