Showing posts with label NBAD UAE Auto Finance. Show all posts
Showing posts with label NBAD UAE Auto Finance. Show all posts

Wednesday, May 24, 2017

UAE Car Finance Market Outlook to 2021: Ken Research

How Car Finance Market Is Positioned In UAE?
The United Arab Emirates is the second-largest automotive market including cars, parts and accessories, trailers and semi-trailers, trucks, public transport vehicles, and tractors in the GCC after Saudi Arabia. Passenger cars account for approximately ~% of the UAE automotive market, with commercial vehicles such as trucks, vans and buses accounting for the remaining ~%. Owing to low car prices, well constructed highways, and most importantly the low fuel prices and easy availability of car finance, owning a car is relatively easier in UAE.
Used Car Sales in the UAE
UAE’s financing methods are different from the conventional methods of financing. Majority of the banks and finance companies follow the Sharia system which does not include the concept of interest. Until May 2011, the customers were eligible for 100% loan on cars; a system of down payment did not exist for car loans.
In May 2011, the government, as a reform to tighten car financing, introduced the system of down payment. From then, the customers can obtain ~% of the cost as loan and ~% of the cost is mandated to be paid as down payment by them.
During the review period, 2011-2016, the market has displayed a decent growth until 2015, but by the end of 2015 the market started declining. A fall in the credit disbursement had been observed during 2016 that was resulted out of the falling oil prices, increasing loan rejection rates, stringent lending policies adopted by the banks due to the piling up of non-performing loans and other such factors. However, upcoming trends such as increased demand of electric vehicles, growth of used car market and others are expected to enable the market recover in the coming years.
What Are The Major Trends And Issues In UAE Car Finance Market?
From the past few years, the demand for used cars is rising in the country. In 2014, the market for used cars has increased by ~% due to which it is estimated that the used car market will overtake the new car market in the next ten years. The used car market of UAE is worth nearly USD ~ billion as of 2016.
The introduction of quotas for hybrid cars in government vehicle fleets, coupled with campaigns aimed at encouraging Dubai’s motorists to switch to environment friendly cars, is expected to open up new markets for the sector. Recently, the government of Dubai has decided that, 10% of all new vehicles bought by the Dubai government will be electric cars with a motive to reduce emissions by 16%, by the end of 2020.
The rising rate of non-performing loans has induced the Central Bank of UAE to appoint an assessor of individual and corporate credit worthiness named Al Etihad Credit Bureau in 2014. The introduction of consumer credit data from the bureau has led to more cautious lending policies. This has increased the rejection rates of loans in the country thereby impacting the credit disbursed for car loans.
What Is The Future Outlook For UAE Car Finance Market?
The market is expected to recover during the forecast period from the fall that was observed towards the end of the review period. It is anticipated that the car finance market in the country will grow at a CAGR of ~% during the forecast period 2017-2021. The recovery is presumed to be at a slow pace due to various factors such as low deposit rates prevailing in the market and high rate of non-performing loans compelling the banks to consolidate their existing activities rather focusing on growth. Moreover, the impact of credit reports made available by the credit bureau is expected to raise the loan rejection rates.
However, a growth is expected to be observed in the market even in the midst of all the aforementioned factors, which will be supported by an increased number of bundled offerings, new innovative strategies adopted by the banks and dealers and other entities. In accordance with the current trend, the used car penetration is displaying a consistent lift. Hence, it is anticipated that a rise in the demand for used car serve as a driving force for the proliferation of car finance market.
Companies Cited In the Report
List of Companies                                   Companies Covered in the Report
Mashreq Bank
Dubai Islamic Bank
Emirates Islamic Bank                              Major Players in UAE Car Finance Market
Al Hilal Bank
Emirates NBD
Al Wifaq Finance
Finance House
Key Factors Considered In the Report
UAE Car Loan Industry
NBAD UAE Auto Finance
Used Car Sales in the UAE
Financing a Used car in UAE
Compare Auto Loans in the UAE
Car Financing Option in UAE
Vehicle Financing in the UAE
Used Car Financing in the UAE
For more coverage click on the link below:
Related Reports by Ken Research
Contact:
Ken Research
Ankur Gupta, Head Marketing & Communications
+91-124-4230204

Tuesday, May 23, 2017

Easy Accessibility to Car Finance and Increased Demand for Passenger and Commercial Cars will be Key Growth Drivers in the UAE Car Finance Market: Ken Research

Increasing demand for new and used cars, low profit rates or interest rates, increased number of offers from banks and private finance companies and easy accessibility to loans are the key factors that contributed to the growth of car finance market in UAE.           
The report titled “UAE Car Finance Market Outlook to 2021 – Rising Car Finance Penetration and Multiple Car Finance Products Offered by Banks to Foster Market” by Ken Research suggested a positive CAGR in terms of credit disbursed in car finance market in the next 5 years till 2021.
The UAE car finance market is known for Islamic financing with the exclusion of ‘riba’ which means interest. Majority of banks and private finance companies follow the Islamic principles of financing. The market has been displaying a growth trend until 2015 supported by factors like growing demand for new and used passenger and commercial cars, rising SME automotive sector, easy accessibility to finance, variety of offers from dealers and banks and such other factors. The value of used cars has seen a consistent rise in the recent years.  During 2011, the average cost was AED 63,000 for new cars which had reached AED 70,000 by 2016. Used cars in UAE is generally expensive than used cars in Latin America, Asia and Africa. This increases the amount of credit disbursed for used car finance. By the end of 2015, the market started displaying a declining trend due to the fall in the sale of new and used cars resulting from the economic slowdown of the country due to falling oil prices. The economic slowdown has also affected the car finance market. The lower oil prices have resulted in weaker deposits for most of the banks in UAE which led the banks to be more focused on the consolidation rather than growth. The banks started being more cautious on consumer lending such as car loans.
UAE Car Financing Market
Over the past few years, there had been a rise in the rate of non-performing loans which has induced the Central Bank of UAE to appoint an assessor of individual and corporate credit worthiness named Al Etihad Credit Bureau in 2014. The introduction of consumer credit data from the bureau has led to more cautious lending policies.
Key Topics Covered in the Report:
NBAD UAE Auto Finance
Used Car Sales in the UAE
Financing a Used car in UAE
Compare Auto Loans in the UAE
Auto Finance Opportunities in UAE
Top UAE Car Loans Banks
Car Financing Option in UAE
Vehicle Financing in the UAE
Used Car Financing in the UAE
New and Used Car Financing in UAE
For more coverage click on the link below:
Related Reports by Ken Research
Contact:         
Ken Research
Ankur Gupta, Head Marketing & Communications
+91-124-4230204