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The Europe Automotive Financing Market size is forecast to increase by USD 6.14 billion, at a CAGR of 4.43% between 2023 and 2028. Several factors play a crucial role in the market's growth, such as the rise in cab service financing, the digitization of automotive financing, and the rising demand for luxury vehicles. The report provides market size, historical data spanning from 2018-2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The rise in cab service financing is the key factor driving the market. The surging demand for cab services worldwide has prompted various tech-based companies to enter the market, offering convenient transportation solutions. While taxi drivers eagerly sign up on these platforms for a steady income, limitations arise if they don't own the vehicle they operate. This hurdle particularly affects those aspiring to drive their own cabs, hindered by financial constraints or challenges in obtaining credit. To address this, automotive financing companies are introducing flexible loan terms and discounts for potential cab drivers looking to purchase new cars.
Furthermore, cab service providers are forging partnerships with financiers and car dealers to offer financing programs with favorable long terms. For instance, Uber's vehicle solutions program provides up to 90% financing for new cars, with payments deducted automatically from drivers' earnings. This collaboration between cab service providers, financiers, and auto lenders aims to facilitate vehicle ownership for drivers, especially in the growing market for electric and commercial vehicles. Such initiatives are expected to boost the demand for loans in the banks segment, further driving growth in the commercial and consumer financing space. Thus, the presence of such financial programs will lead to market expansion during the forecast period. Key Market Trends
Growing demand from SMEs is the primary trend in the market. SMEs require vehicles to meet the needs of transporting employees and goods. A significant outflow of capital is required to meet these transportation needs. Vehicle financing through automotive loans offers an alternative and provides various advantages to SMEs. Vehicles are depreciating assets, and hence, a company has to incur high costs in upgrading to a newer model of a vehicle. However, loans for purchasing vehicles offer a cost-effective alternative, wherein the loan taker must only pay for the depreciating factor of the vehicle and can upgrade easily after the expiry of the loan payment period. Monthly loan payments are generally less than lumpsum payments for purchasing a vehicle.
Additionally, the greater the number of vehicles a company owns, the higher will be the costs incurred on their maintenance. In addition, new vehicle models offer better fuel economy, which is an important criterion for SMEs as it ensures that they do not spend more than the required fuel cost. Thus, these factors encourage SMEs to opt for automotive financing, making them key customers for the Europe automotive financing market, especially as it allows them to avail of automotive financing services in a convenient and hassle-free manner, which, therefore, will drive the growth of the market during the forecast period.
Ride-sharing services gaining traction is a challenge that affects market expansion. The rideshare industry has been gaining popularity in the past few years as it helps in reducing traffic, saving money, and protecting the environment. Ride-sharing services are useful for people who do not own a car, travelers going out of town, and people needing a car for a definite time, which could range from one hour to a few weeks. By using ride-sharing services, users can help reduce the number of vehicles on the road, which will also reduce travel time.
Furthermore, the market for car sharing is growing due to the increase in the number of services in Europe due to the high number of automotive OEMs present in this region. An increasing number of customers opting for ride-sharing services will affect the sales of automotive vehicles negatively, which will be a challenge for the growth of the market in focus during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Banco Santander SA: The company offers services through points-of-sale and direct-to-consumer channels such as branches, phone centers and internet.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 19 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The used vehicle segment is estimated to witness significant growth during the forecast period. As used vehicles offer better value for money, many customers prefer them. In addition, in a few countries in the region, the annual registration fees are based on the value and model year. Therefore, the registration fees decline drastically in the first few years after a vehicle is manufactured. Further,, most purchase decisions about used vehicles depend on the customer's conviction about the quality of the available vehicles.
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The used vehicle segment was the largest segment and was valued at USD 17.45 billion in 2018. Moreover, the quality of used vehicles is a key decision-making factor as details about ownership are vague, and any damage to used vehicles after they are purchased is not covered by warranty. The purchase criteria for used vehicles are also impacted by the affordability and financial strength of customers. Market players offer used vehicle loans to help customers purchase vehicles such as passenger cars and commercial vehicles due to the growing demand for used vehicles. Thus, such factors will drive the growth of the segment of the Europe automotive financing market during the forecast period.
The market report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
In Europe, the market is driven by a diverse array of financial institutions, including banks, credit unions, and online lenders, along with specialized entities like automotive finance companies and fintech companies. Factors such as the increasing popularity of electric cars and challenges such as job losses have influenced the market dynamics. To address these issues, there's a rise in payment deferrals, loan restructuring, and interest rate reductions by auto lenders.
The global automotive finance market is witnessing innovations like cryptocurrency payments and platforms such as Car Now, Cion Digital, and Upstart, leveraging artificial intelligence for streamlined processes. The market is segmented into direct and indirect segments, covering both loan and leasing segments, particularly focusing on passenger vehicles
Market Scope |
|
Report Coverage |
Details |
Page number |
152 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.43% |
Market Growth 2024-2028 |
USD 6.14 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
2.95 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ALPHERA Financial Services, Banco Santander SA, Bank of America Corp., Bayerische Motoren Werke AG, Blue Motor Finance Ltd., Capital One Financial Corp., Credit Agricole SA, ESKA Finance s.r.o., First Response Finance Ltd., Ford Motor Co., Honda Motor Co. Ltd., JPMorgan Chase and Co., Mercedes Benz Group AG, NatWest Group plc, Porsche Automobil Holding SE, Startline Motor Finance Ltd., Sumitomo Corp., Toyota Motor Corp., and Wells Fargo and Co. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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