Market Insight
The report “Vietnam Auto Finance Market Outlook to 2026F- Driven by digital penetration and dominance of banks along with a shift in consumer preference from 2W to 4W. “Provides a comprehensive analysis of the Auto Finance market in Vietnam. The report covers an overview and genesis of the industry, auto finance market size; market segmentations; analysis of the auto finance market; trends and developments, issues and challenges, and comparative landscape including market shares of major companies, competition scenario, cross-comparison and cost sheet of major market players in Vietnam. The report concludes with future market projections of each segmentation and Analyst recommendations to win the Auto Finance Market in Vietnam.
Vietnam Automotive Overview
Although the pandemic has affected almost all sectors, the automotive sector was one of the worst hits among all the other sectors. The impact of COVID-19 dampened the demand for new vehicles, with a serious decrease in new vehicle sales, with 33% lower sales than in 2019. The lack of capital investment and requisite experience and technology to manufacture components considerably hamper Vietnam’s automotive industry. Vietnam imported $1.4 Mn and exported $0.1 Mn vehicles, making it a heavy importing country for vehicles in 2021.How Is Auto Finance Market Positioned In Vietnam?
Vietnam Auto Finance Market Overview:
The Pandemic has resulted in the slow growth of Auto Finance where Vietnamese preferred to own a private vehicle to avoid public transportation. The Vietnamese Government has also decided on a motorbike ban after 2030 to reduce traffic congestion and emissions. The market has also seen a shortage of semiconductor chips which has dropped the market growth rate from 2019 to 2021. Also, with the growing purchasing power of the middle class, the number of customers buying a passenger vehicle increased due to its status symbol. The economy is also flourishing with Foreign Direct Investments (FDI) as the driving force where the total registered FDI inflow was $ 38.8 Bn in 2021.
Vietnam Auto Finance Market Segmentations
By Type of Vehicle Financed:
Technology disruption in the economy has boosted the auto finance industry via mobile or web-based platforms that allow easy viewing, comparisons of price, time period offered and applying for different loan services available.
By Tenure of New and Used Vehicles: People in Vietnam switch their cars every 4-5 years and hence, majority of auto loans are taken for a duration of more than 3 years.
By Type of Motor Vehicle: Commercial Vehicles are used for service purposes, especially for migrants who do not own a car to commute. Vietnamese prefer commercial vehicles for long-distance travel as it offers a cheaper fare.
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By Type of Passenger Vehicle: The Government of Vietnam has decided to ban 2w/ motorcycles by 2030. The decision is motivated by the fact that the middle class is growing and will be able to buy cars.
By Type of Commercial Vehicle: Vietnamese preferred owning a private vehicle, especially LCV’s due to personal choice along with long servicing life and fuel efficiency of the vehicle.
By Type of Lenders: Banks hold the majority of auto financing, however, there is a recent trend towards non-banking financial institutions in Vietnam.
By Type of Lending Bank: Vietnamese prefer lending from government banks/ institutions as the interest rate policies are more transparent in public sector banks than private banks.
Competition Scenario In Vietnam Auto Finance Market
The competition in the Auto Finance market was observed to be a moderately consolidated market in Vietnam. VIB is the market leader owing to the most market share and clients. The Vietnam Auto Finance Industry also includes other major players like Toyota Financial Services, TP Bank, VP Bank, Vietin Bank, and more. Companies are striving to adopt higher technological advancements to improve operational profits along with a rich customer experience.
Vietnam Auto Finance Market Future Outlook and Projections
Vietnam Auto Finance Market is expected to grow CAGR ~ in 2016-2026F with a robust revenue hike during 2022F-2026F. Digitalization in Vietnam is anticipated to rise in the future which will lead to an increase in the Auto Finance market with multiple offline and e-platform players entering the market. Also, the increase in the population and growing income levels leading to rising in sales of cars is expected to drive the rise in Auto Outstanding Loans in Vietnam. Used Vehicles are more likely to be purchased by the bourgeois as they are usually cheaper with less insurance coverage compared to the new vehicles. The Vietnam government has proposed a regulation wherein the import of used vehicles older than 5 years has been discontinued which is expected to boost the sales of domestically produced used vehicles in the future. A similar trend where post the pandemic, Vietnamese have been preferring to own a private vehicle to avoid public transportation is anticipated to occur. Banks and other financial institutions are putting their best effort into promoting their consumer finance products and increasing finance penetration in the future. The accessibility to finance is expected to grow with an increase in the number of multi-finance companies which will further increase the share of auto finance companies in the country.
Key Segments Covered: -
Vietnam Auto Finance:
By Type of Vehicle financed
New
Used
By Tenure:
1 year
2 years
3 years and more
By Type of Motor Vehicle:
Commercial
Passenger
By type of commercial motor Vehicle:
LMV
MCV
HCV
By Type of passenger motor vehicle
2W
3W
4W
By Type of Lender:
Banks
OEMs/Captives
NBFC
By Type of Lending Bank:
Government
Private
Key Target Audience
Vietnam Auto Industries
Government Bodies & Regulating Authorities
Financial Institutions
Manufacturing Companies
Automobile Distributors
Automobile Dealers and Associations
Investors & Venture Capital Firms
Time Period Captured in the Report:
Historical Year: 2016-2021
Base Year: 2021
Forecast Period: 2022F– 2026F
Major Banks:
Bank for Investment & Development
Vietcom Bank
Sacom Bank
Techcom Bank
Shinhan Bank
Vietnam International Commercial Joint Stock Bank
Vietin Bank
Tien Phong Bank
Woori Bank
Key Topics Covered in the Report
Vietnam Automotive Industry Overview
Vietnam’s Online Auto Finance Market Ecosystem
Business Cycle, Genesis, and Timeline of Vietnam Online Auto Finance Market
Vietnam Auto Finance Value Chain Analysis
Vietnam Auto Finance Market Size, 2021
Vietnam Auto Finance Market Segmentation (by Type of Vehicle Financed, by Type of Motor Vehicle, by Type of Passenger Vehicle, by Type of Commercial Vehicle, by Type of Lenders, by Type of Lending Banks, by Tenure of New and Old Vehicles), 2021
SWOT Analysis of Vietnam Auto Finance Market
Government Regulations of Vietnam Auto Finance Market
Trends and Developments of Vietnam Auto Finance Market
Decision Making Parameter for Selecting Car Loan Vendor
Issues and Challenges in Vietnam Auto Finance Market
Customer Analysis of Auto Finance Market in Vietnam
Competition Overview of Auto Finance Market in Vietnam
Future Outlook and Projections of Auto Finance Market in Vietnam, 2021-2026F
Impact of COVID-19 on Auto Finance Market in Vietnam
Analyst Recommendations for Online Auto- Finance Market in Vietnam
For more insights on the market intelligence, refer to the link below: -
Vietnam Auto Finance Market Analysis
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