Japan Automotive Loan Market is Dominated by Passenger Cars During the Forecast Period
Increasing
sales of passenger cars, the rise of non-banking financial institutions that
offer low-interest EMIs, and the expansion of digitalization are the leading
factors expected to drive the Japan Automotive Loan Market during the projected
period.
According to TechSci Research
report, “Japan Automotive Loan Market–Industry Size, Share,
Trends, Competition, Opportunity, and Forecast, 2018-2028F” The Japan automotive loan
market is expected to grow faster during the forecast period as the Japanese
automotive industry is one of the world's most well-known and significant
industries. The expanding economy, increasing consumer demand for vehicles and low-interest
rates are the factors driving the Japan automotive loan market. The growing
demand for SUVs, light commercial, and electric vehicles is rising. Due to the
high prices, consumers are availing of automotive loans, driving the demand for
the automotive loan industry during the forecast period. Moreover, the demand
for loans in Japan is rising again. After a drop in prior years, slow recovery
becomes visible again. The demand grew slightly, primarily due to automotive
loan demand, which drove the positive performance of the entire market.
Moreover, the automotive loan
is also offered to buy commercial vehicles in which consumers borrow money from
a financial institution to purchase a commercial vehicle using the automotive
loan. Suppose a consumer buys a vehicle with an automotive loan. In that case,
the consumer has to pay various taxes such as automobile taxes, acquisition
taxes, weight taxes, and mandated auto liability insurance. These are just a
few fees that will need to be paid. This is the process when an automotive loan
is taken from the bank.
The interest rate is the most
crucial component of an automotive loan. Since buying a car is an expensive
investment, even a 1% difference in interest rates can significantly impact the
overall amount of payback. The amount of interest increases with the period of
the loan's repayment period. Therefore, many people make additional repayments
on a monthly payback amount when they have enough money to minimize the overall
compensation or shorten the repayment time.
According to the government
of Japan (GoJ), a goal was recently announced: all new cars sold in Japan will
be environment-friendly by 2035. The government of Japan (GOJ) is committing to
subsidize a portion of the cost of buying CEVs such as Battery Electric
Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), and Fuel Cell
Electric Vehicles (FCEVs), as the price of electric vehicles, is higher than
conventional vehicles which are less affordable to the consumer. Therefore,
they are availing auto loan to make the purchase which is during the automotive
loan industry in Japan.
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The Japan automotive
loan market is segmented on the basis of vehicle type, provider type,
percentage of amount sanctioned, tenure, and region.On the basis of vehicle
type, the market is further divided into two-wheeler, passenger cars, and
commercial vehicles based on vehicle type. Passenger cars have a significant
share, followed by commercial vehicles during the forecast period.
On the basis of provider
type, the market is segmented into banks, NBFCs (non-banking financial companies,
OEM (original equipment manufacturers), and others (fintech companies). Based on
the percentage of amount sanctioned, the market is segmented into less than
25%, 25-50%, 51-75%, and more than 75%. On the basis of tenure, the market is further
segmented into less than three years, 3-5 years, and more than five years. On
the basis of region, the market is divided into North Japan, South Japan, and
Central Japan.
Key market players in the Japan
automotive loan market include:
- SURUGA bank Ltd.
- Orient Corporation
- Bank of Kyoto, Ltd.
- Maruhan Japan Bank Lao
Co., Ltd.
- The Senshu Ikeda Bank,
Ltd.
- Toyota Financial
Services Corporation
- The Kinokuni Shinkin
Bank
- Sompo Japan Insurance,
Inc.
- The 77 Bank, Ltd
- Japan Auto Loan Gurantee
co., ltd
- AK Kogyo Co., Ltd.
AEON Product
Finance, a division of AEON Financial Service, and Yamato Juken, a home builder
based in Hyogo Prefecture, have collaborated to offer a package loan that
enables customers to buy a Zero Energy Home (ZEH) and an electric vehicle (EV)
under a single loan. Moreover, Toyota Financial Services Philippines
Corporation (TFSPH), a Philippine-based subsidiary of Toyota Financial Services
Corporation, and the Japan Bank for International Cooperation (JBIC; Governor:
MAEDA Tadashi) signed a loan agreement in 2021 in US dollars. The loan is
co-financed with a private financial institution. The collaborations mentioned
above drive the demand for automotive loans in Japan during the forecast period.
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“The automotive loan
market is increasing with the increasing demand for automotives in Japan, and
the rising price is prompting consumers to buy automotive loans to make
purchases. The market is also growing since a greater segment of the population
can now afford automotive loans due to the reduction in interest rates. Owing to
the shifting consumer lifestyles, expanding automotive production volume, and
growing demand for fuel-efficient vehicles, there is expected to be a rise in
the demand for automotive loans for passenger vehicles and commercial vehicles
during the forecast period,”
said Mr. Karan Chechi, Research Director with TechSci Research, a
research-based global management consulting firm.
“Japan Automotive Loan Market
By Vehicle Type [Two-Wheeler, Passenger Car, Commercial Vehicle], By Provider
Type [Banks, NBFCs (Non-Banking Financial Company, OEM (Original Equipment
Manufacturer), Others (Fintech Companies)], By Percentage of
Amount Sanctioned [Less than 25%, 25-50%, 51-75%, More than 75%], By
Tenure [ Less than 3 Years, 3-5 Years, More than 5 Years], By Region, By
Company, Forecast & Opportunities, 2018-2028F”, has evaluated the future
growth potential of automotive loan in the Japan market and provides statistics
and information on market structure, size, share, and future growth. The report
is intended to provide cutting-edge market intelligence and help decision
makers take sound investment decisions. Besides, the report also identifies and
analyzes the emerging trends along with essential drivers, challenges, and
opportunities present in the Japan automotive loan market.
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