Philippines Auto Finance market size is expected to reach USD ~18 Bn by 2026 owning to rising demand of automotives, e-vehicles sales and growing fintech startups: Ken Research

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Feb 07, 2023, 13:54 ET

GURUGRAM, India, Feb. 7, 2023 /PRNewswire/ -- Philippines Auto Finance Market is in the growing stage, being driven by rising demand of automotives, positive outlook for e-vehicles, and potential for fintech growth. There are several players in the Philippines Auto Finance market some of which Metro Bank, Citi Bank, HSBC, RCBC, Global Domain, Asialink, Toyota Financial Service, JP Morgan, Maybank etc.

Philippines Auto Finance Market is in the growing phase and is driven by introduction of captives and online aggregators as well as growing prevalence of financing companies and auto dealers in the industry.
Better Technological Infrastructure and the rising usage of AI and ML for better Auto lending experience with Innovative Business Models such as Subscription Lending & shared ownership will the way for the growth in Philippines auto financing industry.
Philippines closed 2021 as the second fastest growing market for motor vehicles in Southeast Asia, with the number of units produced and sold registering double-digit increases from the previous year.

Growing Digital Advancements: The Industry is increasingly moving towards newer technology such as Artificial Intelligence and Machine Learning to improve its efficiency. The Insurance Commission continues to push for digitalization and further innovation by promoting better customer service. For instance, Fintech PH aims to position the Philippines as a hub for technological innovation in financial services through the partnership with the technology associations in China, Denmark, Israel, Japan, Malaysia, Singapore, and Thailand. In the past, 5 – 10 years, Philippines is witnessing a new wave of digital enhancements with several new fin-tech platforms for aggregation, peer – to – peer lending and more coming in the market. Some of the most well-known of these start- ups are- Moneymax, Seekcop, Justpay.to, pesopay etc.

Constant growth in automobile industry: Despite supply constraints, the auto industry seems to be growing at a high rate. The rise in private car service financing is driving the Philippines automotive financing market. For instance, it is the fourth largest automotive market in South East Asia increased by double digit in May 2022.

Increasing Private Hire Car Service, a large number of people in Philippines are now preferring private Hire Cars leading to potential increase in their financing in future. Green Car Loans or Electric Vehicles is an emerging segment in Philippines leading way for green loans in the country.

Green Vehicle Policy: The Philippine electric vehicle (e-vehicle) industry aims to have a nation where the use of electric vehicles is highly promoted, encouraged, and supported by its government and society in order to develop a transportation landscape that is one with the environment, ecologically and economically. The EV Act seeks to develop the Philippine electric vehicle (EV) industry and create a Comprehensive Roadmap for the EV Industry (CREVI). The law covers the manufacture, assembly, construction, import, trade and regulation of EVs, related equipment and their charging stations, and the tax incentives accompanying these projects.

Financial Support Provision: Auto Finance Companies and Dealerships are also expected to further increase their financing and contracting options making them more flexible to support retail Sales. It is expected that NBFC and Captive companies will start picking up more pace than Commercial Banks in Philippines Auto finance Industry

Analysts at Ken Research in their latest publication "Philippines Auto Finance Market Outlook to 2026- Driven by change in consumer spending, ease in provision of loans, improving technology and government support" by Ken Research observed that Auto Finance Market is an emergent market in Philippines at a growing stage even during the pandemic as well. The rising demand for automobiles, Positive Outlook for E-Vehicles, and growing digital advancement like Artificial Intelligence and Machine Learning, are expected to contribute to the market growth over the forecast period. The Philippines Auto Finance Market is expected to see high growth rate with a CAGR of 6.8% over the forecasted period 2021-2026F.

Key Segments Covered

Philippines Auto Finance Market

By Category of Lenders (By Credit dispersed), 2021 & 2026F

Universal and Commercial Banks
Thrift Banks
NBFCs
Captives

By Type Of Vehicles (By Credit dispersed), 2021 & 2026F

Two and Three Wheelers
Four Wheelers
Buses and Trucks

By Type of Ownership (By Credit dispersed), 2021 & 2026F

Used Cars
New Cars

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By Category of Vehicles (By Credit dispersed), 2021 & 2026F

Passenger Vehicles
Commercial Vehicles

By Loan Tenure (By Credit dispersed), 2021 & 2026F

12 - 24 Months
25 – 48 Months

By Geographical Location (By Credit dispersed), 2021 & 2026F

Region I
Region II
Region III
Region IV - A
Region IV - B
Region V
Region VI
Region VII
Region VIII
Region IX
Region X
Region XI
Region XII
NCR
C.A.R
CARAGA

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

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Time Period Captured in the Report:

Historical Period: 2016-2020
Base Year: 2021
Forecast Period: 2022– 2026F

Companies Covered:-

Asialink Finance Corporation
Yulon Finance Philippines Corporation
Security Bank
MetroBank
Welcome Bank
Toyota Financial Services Philippines Corporation (TFSPH)
Bank of Philippines Island
BDO Unibank
Malayan Insurance
Philippine Depository and Trust Corporation
LBP leasing and Financing Corporation
Robinsons Bank
The Philippine Bank of Communications (PBCOM)
Land Bank of Philippines
Asia United BankDevelopment Bank of Philippines
Union Bank
Sterling Bank of Philippines
Penbank and more

Key Topics Covered in the Report:

Philippines Population Analysis, 2021
Automotive Transport Overview
Ecosystem of Philippines Auto Finance
Philippines Auto Finance Market Evolution
Philippines Auto Finance Market Value Chain Analysis
Types of Car Loans in Philippines Auto Finance Industry
Philippines Auto Finance Market Segmentation
Philippines Automotive Future Outlook
Philippines Auto Finance Industry Analysis
Decision Making Parameter for Selecting Car Loan Vendor
Issues and Challenges in Philippines Auto Finance Industry
SWOT Analysis of Philippines Auto Finance Industry
COVID Impact on the Philippines Auto Finance Industry
Government Policies affecting Philippines Auto Finance Industry
Competitive scenario in Philippines Auto finance Market
Digital disruptions in Auto Finance
Analyst Recommendation

For more insights on the market intelligence, refer to below link:-
Philippines Auto Finance Market

KSA Auto Finance Market is expected to grow with a positive CAGR during the future period 2021-2026F. The Vision 2030 project in KSA has massive plans for the economy targeting to improve employment figures that might aid the auto finance market as well. A lot of new construction activities are taking place like the Neom and Red Sea project which will increase demand for commercial vehicles and majorly HCVs. It is expected that the commercial vehicles demand/ production is going to rise till 2025, thereby positively affecting the market.

Singapore Auto Finance Market Outlook to 2025 (Edition II) – Driven by exorbitant Car Prices, Growing Digital Penetration and evolving Vehicle Ownership Characteristics amidst Systemically Regulated Car Ownership Policies by the Government

The Singapore Auto Finance industry is expected to increase at a CAGR of ~11% basis Auto credit disbursed and ~0.4% basis Auto Loan Outstanding during 2020 to 2025. The credit disbursed is expected to rise in Singapore at higher than average CAGR owing to higher number of cars financed in the future. The government of Singapore is working towards expansion of Green Car Sales in the country, which is expected to increase the demand of 'Green Car Loans' in the future years. New Business Models such as Shared Ownership Financing may also emerge in the country in the coming years. Lastly, Industry is expected to move towards a digital growth with the expansion of Artificial Intelligence, Machine Learning, Big Data and more to further simplify loan application process.

Thailand Auto Finance Market Outlook to 2026F- Driven by Road Infrastructure Development and Economic Growth in the Country

According to Ken Research estimates, the Thailand Auto Finance Market grew from approximately THB 900 Bn in 2016 to approximately THB 1200 Bn in 2021, and is forecasted to grow further to ~ THB 1800 Bn by 2026F owing to the increasing purchasing power of the consumers and adoption of EVs. The automotive industry in Thailand is the largest in Southeast Asia and the 10th largest in the world. Banks have been the dominant players as they have huge pre-built database that they leverage for their own advantage. Many Western brands are present in the country but Japanese brands have long had a dominant position in Thailand due to affordable prices.

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Ken Research Private Limited
Ankur Gupta, Director Strategy and Growth
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SOURCE Ken Research