Indonesia Auto Finance Market is in Growing Stage with Banking Institutions & NBFCs leading the market & Online Aggregator Platforms entering the Market: Ken Research

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1.  Import & Export of Indonesia are picking up pace after the Global pandemic in 2020; Japan being the major contributor in the imports

Indonesia’s entire automotive industry is centered around Bekasi, Karawang & Purwakarta regions in West Java, located near the capital city, Jakarta where the demand for cars is relatively on a higher spectrum as well as an area with a well- developed infrastructure. Moreover, a number of big players in the car market of Indonesia such as Toyota & Daihatsu that captures almost 60% of market share in automobiles have invested in industrial estates as well as car & component manufacturing plants in Jakarta, making it the ‘Detroit of Indonesia.

2.  Online Auto Finance Aggregator Platforms is an emerging market in the country which is expected to simplify the loan acquisition process drastically

Aggregator platforms such as Cermati and Broom can collaborate with Banks, Captives, NBFCs, Fintech Lenders & other peer to peer lending platforms in order to provide the end user multiple financing options that ultimately leads to a more transparent & streamlined vehicle-buying process eliminating obstacles such as insufficient information & hectic loan disbursal.

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3.  Financing of auto vehicles by NBFCs in Indonesia is expected to rise as a result of new emerging technologies, ease in the process & longer loan tenure

In the past 5-10 years, Indonesia is witnessing a new wave of Digital enhancement with several new fin-tech platforms for aggregation, peer-to-peer lending entering into the market. The industry will be witnessing a steady growth that will impact the market scenario in a positive way with NBFCs leading the financing element of the market. Moreover, a decline in the trust amongst people when financing loans from banks can prove to be beneficial to NBFCs. This is mainly due to an ease in financing process, lower granting benefits & other additional benefits.

4. New Car Loans, Used Car Loans, Lease buyouts, and Refinancing are 4 major options of financing available in Indonesia for automobile sector

• New Car Loan: New Car Loan is a loan for new cars. Customer can generally borrow up to 70% or 80% of the value of the carthey are trying to purchase, according to guidelines set by the Financial Authority of Indonesia.
• Used Car Loan: Similar to the new car loan system, in this case, the interest rates were around quite high for the last quarter of 2021.
• Lease Buyouts: For lease buyouts, the car dealer plays the role of a middleman to secure a loanfrom the bank on the customer’s behalf.
• Refinancing: Refinancing is basically the replacement of an existing debt obligation (automotive loan) with another debt obligation (automotive loan) under a different term and interest rate. Refinancing loans are also provided by stakeholders like Banks, NBFCs, and Captives

For more information on the research report, refer to below link:-

Indonesia Auto Finance Industry

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Rising Automobile Aggregators, Increasing Customer Expenditure with Growing Digital Advancement and Government Initiative had driven Indonesia Auto Finance Market: Ken Research

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Rising Automobile Aggregators: Innovative digital startups such as Cermati are reshaping the challenging automotive shopping and financing process into a quick and easy experience for customers by creating an auto finance ecosystem where specialized players occupy the various parts of the value chain. In the West Java Region, various big global car-makers invested in industrial estates as well as car and component manufacturing plants. Therefore, it has become the production base of Indonesia's automotive sector (including motorcycles) and can be labelled the "Detroit of Indonesia. Auto Finance Companies and Dealerships are also expected to an increase their financing and contracting options making them more flexible to support retail Sales.

Customers Buying Behaviour: Expenditure-Income ratio of people of Indonesia is quite high in comparison to other ASEAN countries like Brunei Darussalam, the Philippines and Singapore. This increases the buying tendency, purchasing power as well as the consumption rates.

Public Transportation: As Indonesia has a large population, the government has a target to increase the share of trips on public transport to be the largest in the auto segment by 2030. Public transportation has been really helpful and popular, and nowadays use of online transportation like Uber and Grab is rising.

Growing Digital Advancement: Dealers can ensure they’re reaching online-first car shoppers by investing in an all-encompassing digital marketing solution that leverages mobile, location, and social media. Also, by 2023, the BSP hopes to have digitalized most of the payments and encouraged Majority of the population to open bank accounts. Automotive Financing Companies are increasingly moving towards higher technological advancements to improve operational profits as well as customer experience. For example- the use of AI is increasing to make important loan decisions in real time.

Change in Regulatory Framework: The government of Indonesia and financial regulatory authority has lowered the down payment rates and the interest rates to make financing a viable. “Healthy” multi-finance companies with non-performing financing (NPF) ratio <1% are allowed to offer 0% down payment for vehicles purchases with credit by OJK which has increased demand for Autocredit in Philippines.

Analysts at Ken Research in their latest publication “Indonesia Auto Finance Industry Outlook to 2026 - Driven by growing digital penetration, evolving vehicle ownership characteristics and rebates by the Government amidst systematically regulated vehicle ownership and financing policies by the regulatory authorities” by Ken Research observed that Auto Finance Market is an emergent market in Indonesia, which is at a growing stage even during the pandemic as well. The rising demand for automobiles, Rising Automotive Aggregators, high Spending capacity of the population, government initiatives and growing digital advancement like Artificial Intelligence and Machine Learning, are expected to contribute to the market growth over the forecast period. The Indonesia Auto Finance Market is expected to see high growth rate over the forecasted period 2021-2026F.

Key Segments Covered:-

Indonesia Auto Finance Market

By Category of Lenders (by Credit Dispersed), 2021 & 2026F: 

Captive Financing Companies

Banks

NBFCs

By Type Of Vehicles (by Credit Dispersed), 2021 & 2026F:

Two Wheelers

Three Wheelers

Four Wheelers

By Type of Ownership (by Credit Dispersed), 2021 & 2026F:

Used Cars

New Cars

By Category of Vehicles (by Credit Dispersed), 2021 & 2026F:

Passenger Vehicles

Commercial Vehicles

By Duration of Loan (by Credit Dispersed), 2021 & 2026F:

1 Year

2 Year

3 Year

3+ Years

By Geographical Location (by Credit Dispersed), 2021 & 2026F:

Rural & Semi Urban

Urban

Metropolitan

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Key Target Audience:-

Banks and its Subsidiaries

NBFCs

Captive Finance Companies

Government and Institutions

Automobile Companies

Car Dealers

Government and Institutions

Existing Auto Finance Companies

OEM Dealerships

New Market Entrants

Investors

Auto mobile Associations

Time Period Captured in the Report:-

Historical Period: 2016-2020

Base Year: 2021

Forecast Period: 2022– 2026F

Companies Covered:-

Bank CIMB Niaga

Bank Rakyat Indonesia

Danamon Bank (Adira Dinamika Finance)

Mandiri Bank (Mandiri Tunas Finance)

Megabank (WOM)

Bank Negara Indonesia

BCA Bank

Bank Jasa Jakarta

Cekaja

ACC Finance

Oto Multiartha

Radana Bhaskara

Adira Finance

Indomobil Multi Jasa

Mitsui Auto Finance

Mandiri Tunas Finance

Rabana Investindo

Maybank Finance

Mobil88

OLX Indonesia

Mobil123

Carmudi

Oto.com

Diamond Smart Auto

Carro

Key Topics Covered in the Report:

Demographic overview and major industries of Indonesia

Economic Overview of Indonesia

Trade Scenario of Indonesia

Indonesia Automotive Market – Vehicle sales

Indonesia Automotive Market - Major OEM brands basis passenger cars sales

Indonesia Auto Finance Ecosystem

Indonesia Auto Finance Market Value Chain Analysis

Major Types of auto loans available in the Indonesia Auto Finance Market

Growth Drivers of Indonesia Auto Finance Industry

Decision making Parameters for selecting Auto loan Vendor

SWOT Analysis of the industry

Trends and Developments in the Industry

Issues and challenges in the industry

Government initiatives in the industry

COVID-19 Impact on the Indonesia Auto Finance Industry

Customer Journey

Indonesia Auto Finance Market Sizing

Indonesia Auto Finance Market Segmentation

Indonesia Automotive Finance Aggregator

Indonesia Auto Finance Market - Future Sizing

Indonesia Auto Finance Market - Future Segmentation

Digital Disruptions in the Indonesia Auto Finance Industry

Analyst Recommendations

For more information on the research report, refer to below link:-

Indonesia Auto Finance Industry

Related Reports:-

Vietnam Auto Finance Market Outlook to 2026F– Driven by Digital Penetration and Dominance of Banks along with a Shift in Consumer Preference form 2W to 4W

Qatar Auto Finance Market Outlook to 2026F– Driven by Increasing Vehicle Prices and Low-Interest Rate In The Country

KSA Auto Finance Market Outlook to 2026F– Driven by Women Entering the Market, Growing Private Entities and Initiatives by the Government