Global

Details

  • Industry: Automotive
  • Type: Survey report
  • Date: 9/24/2012

Current state of the finance and leasing market 

Current state

The performance of the finance and leasing business is clearly linked to the state of the automotive market as well as to the banking and finance sector. If financial markets and car sales improve, the outlook for the finance and leasing business is quite positive.

Worldwide passenger vehicle registrations are expected to rise by more than 91 percent between 2011 and 2027, doubling hence in volume. This growth is mainly driven by a surging demand in rapidly growing markets, such as China and India.


Despite a positive global outlook it should not be noted that the current financial crisis, especially in Southern Europe, might also influence the finance and lease business.

Automotive and banking industry are influencing the finance and leasing business

Automotive Industry key issues Automotive and banking industry Banking Industry key issues
  • Overcapacity is prominent everywhere
  • Changing business model
  • Unclear technology roadmap
  • Vehicle design will get adapt to environment
  • Emerging markets further accelerate
  • Limited access to financial markets
  • High interest rates
  • Insecurity of customers
  • High rate of credit default
  • Squeeze of sub- and non prime market

The global auto finance and leasing market remains quite diverse. Nevertheless, in most parts of the world consumers can finance their car purchases in one of three ways:


  • an OEM captive,
  • a commercial bank,
  • an independent finance company.

The global auto finance and leasing market is dominated by three main routes to market


OEM captive Vehicle finance and leasing for private and corporate customers and dealers  
Financing units wholly owned and operated by automotive companies  
  • Vehicle finance and leasing packages
  • Service and insurance products
  • Fleet management
  • Floorplan and inventory financing for dealers
  • Direct banking, credit cards, commercial papers (with full bank license)

Commercial bank   Common banking business – some banks have dedicated business units for vehicle financing  
Standard commercial bank  
  • New car financing
  • Used car financing
  • Direct banking, credit cards, commercial papers

Independent finance company Consumer financing or vehicle finance and leasing
Independent consumer finance or specialized vehicle leasing company  

Independent leasing companies

  • Vehicle finance and leasing
  • Service and insurance products
  • Fleet management

Consumer financing companies

  • Car loans and dealer financing

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automotive finance and leasing

About the study

Global automotive finance and leasing: The role of product diversification and emerging markets in future growth is based on desk research and in-depth interviews with senior executives representing key leasing and financing participants including banks, captives and independent auto leasing and financing organizations from China, France, Germany, India, Japan, Russia and the UK.

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