The key factors driving growth in the Auto Finance
Market are digitalization, development of infrastructure, regional
connectivity, economic boom due to increased exports & foreign investment, rising
demand for commercial vehicles due to rise of cab sharing services and buses due to improved roads and highways.
The
report titled “Vietnam
Auto Finance Market Outlook to 2024 - by Loan Tenure, by Type of Institution
(Commercial Banks and Non- Banking Financial Institutions) and by Type of
Vehicle (Passenger and Light Commercial)” Ken Research suggested a growth at a CAGR of close to 22% on the basis of
credit disbursed in the Vietnam Auto Finance Market during 2018-2024.
Vietnam
auto finance market has been identified at a growth stage with a growing
appetite for passenger and commercial vehicles. The auto loan outstanding has grown
at a CAGR of close to 27% during 2014-2018. The market is concentrated among
top 5 banks in terms of auto loan credit disbursed including VIB Bank, TP Bank,
BIDV, Techcom Bank, Toyota Financial Services and Sacom Bank. These entities
control market trends owing to large customer loyalty & trust associated.
The vast majority of auto financing occurs in banks although there is an
increasing shift to non banking financial institutions in recent years as they
offer lower interest rates, quicker approvals and a simple documentation
procedure. Majority of credit institutions are located in Hanoi and Ho Chi Minh
City, in the northern and southern regions of the Vietnam, being the financial
and economical hubs of the country.
The
local manufacturers like Mazda, Mitsubishi, Nissan are planning to expand
manufacturing operations by 100,000 units, 30,000-50,000 units and 200,000
units respectively, which is expected to increase the value of loan
disbursements by banks and non-banks. The banks and consumer financing
companies are projected to develop their presence in the tier 2 cities of the
country such as Hai Phong, Da Nang and Bien Hoa as to expand
their customer base. The customers which take hire purchase loans in Vietnam
include retail or small scale customers and institutional or large scale
customers. The loans are used for personal purpose; commercial activities
industrial use, pick up and drop services, public transport and others. This
sector has been driven by a stable and growing economy, increasing purchasing
power of the middle class, improvements in infrastructure and lower auto
lending rates.
The
average interest rate of the auto finance market for the year 2017 has been
recorded at 7.4% per annum. The major restraining factors of the market have
been low geographical presence, high non performing loans, increasing price
competition, and high operating costs as a result of digitalization.
Global
taxi services such as Uber and Grab entered Vietnam in 2014 and have since continued
to expand their operations, increasing the number of commercial vehicles
financed from 2014-2018. The customer base has increased due to the good
quality of service, comfortable journey and cheaper price as compared to
Vietnam’s local traditional taxis. There have been 21,000 registered cars in Ho
Chi Minh City (Saigon) for Uber and Grab as of 2017. The interest charged is
7.6% per annum as of 2018, much lower as compared to 2012, which was at 13.5%
per annum. The lowering of interest rates has enabled a higher segment of the
population to be able to afford auto loans, adding to the growing market.
The
Vietnamese economy has grown at CAGR of 9% during 2013-2018. The economy has
flourished with Foreign Direct Investments (FDI) as the driving force, accounting
for 70% of Vietnam’s exports according to the International Monetary Fund (IMF)
as of 2017. This is due to Vietnam’s geographical location as well as its
political and social stability, leading to increasing number of manufacturers
entering the country. The middle class of Vietnam has rapidly developed during
the review period. There are an increasing number of customers buying a
passenger vehicle due to its status symbol and added comfort as compared to
motorbikes.
The
government has focused on improving infrastructure throughout the country to be
better able to handle the surge in passenger vehicle owners. The urban
development project in collaboration with the world bank took place during
2002-2014 has been successful in constructing 243 km of new or rehabilitated
primary and secondary access roads in Vietnam. The government has also
constructed numerous highways in country resulting in higher traffic capacity
and lower accident rates. These improvements have enticed customers to purchase
increasing amounts of passenger and commercial vehicles. All these factors have
together pushed the market forward.
Key Segments Covered:-
By Type of Vehicles (Passenger Vehicles and Commercial
Vehicles on the basis of Credit Disbursed and Auto Loan Outstanding)
By Type of Institutions (Banks & Subsidiaries and Non-Bank
Financial Institutes on the Basis of Credit Disbursement)
By Loan Tenure (1 Year, 2 Years, 3 Years, 4 Years, 5 and More
years on the basis of Volume of Vehicles sold in 2018)
Key Target Audience:-
Existing Auto Finance Companies
Banks & Subsidiaries
Captive Finance Companies
Non Banking Financial Institutions
New Market Entrants
Automobile Financing Companies
Government Organizations
Investors
Automobile Associations
Automobile Original Equipment Manufacturer
Time Period Captured in
the Report:-
Financial Year 2014-2018: Historical Period
Financial Year 2019-2024: Future Forecast
Key Target Audience:-
Existing Auto Finance Companies
New Market Entrants
Government bodies
Investors
Automobile Manufacturers
Automobile Associations
Auto parts Equipment Manufacturer
Companies Cited in the
Report:-
Banks & Subsidiaries
Tien Phong Bank
Vietcom Bank
Sacom Bank
Vietin Bank
Shinhan Bank Vietnam
Saigon Hanoi Bank
Techcom Bank
Vietnam International Bank
Bank for Investment and Development of Vietnam
Non-Banking Financial
Institutions:-
BMW Financial Services
HD Saison Finance Company
Daimler Finance
Toyota Financial Services Vietnam Company Limited
Keywords:-
Vietnam
Vehicle Finance Market
Vietnam
Auto Finance Market Revenue
Vietnam
Car Finance Industry
Vietnam
Auto Credit Disbursed
Vietnam
Auto Loan Outstanding
Vietnam
Auto Loan Market
Vietnam
Car Finance Ecosystem
Vietnam
Car Loan Market Trends
Market
Major Players Auto Finance Vietnam
Loan
Sale Purchase Vietnam
Loan
Outstanding Vietnam
New
Car Finances Vietnam
Old
Car Finance Vietnam
Auto
Leasing Market Vietnam
Bank
Auto Finance Vietnam
Truck
Loan Vietnam
Vietcom
Bank Auto Finance Market
To know more, click on the link below:-
Related Reports By Ken Research:-
Contact
Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249
