UAE Automotive Loan Market is Dominated by Banks During the Forecast Period
Expansion of privately own cars, government initiative
towards loan approval process and digitalization of financial institutions are among
the leading factors driving the UAE Automotive Loan Market during the forecasted
period.
According to TechSci Research report, “UAE Automotive Loan Market– By Region, By Company, Forecast &
Opportunities, 2028F”
The UAE automotive loan market is expected to grow faster
during the forecast period due to the rising digital penetration, changing
vehicle ownership characteristics, and government subsidies in addition to
systemically regulated car ownership and lending policies by regulatory
authorities. Furthermore, the emergence of banks, NBFCs, fin-tech companies,
and online loan aggregator platforms is expanding the automotive loan
market in UAE.
Automotive Loans are
loans provided to customers by financial institutions who want to acquire a
vehicle by banks and financing companies to credit vehicles in the United
Arab Emirates, on the condition that the customer pays the loan amount and loan
expenses in convenient monthly instalments for a specified period of time. Additionally,
automotive loan is typically given out by banks, NBFCs (non-banking
financial services), OEM (original equipment manufacturer), and other
businesses (fintech companies) over a specified time and interest rate.
Additionally, the
government has also encouraged research and development into innovative,
environmentally friendly alternatives like hydrogen, natural gas, and hybrid
vehicles, as well as driverless or autonomous vehicles. This has increased the demand
for automobiles. Furthermore, customer base is growing among younger, more
tech-savvy consumers who anticipate managing their accounts remotely on a
smartphone or computer. Artificial Intelligence is increasingly making crucial
decisions to provide third party funders, brokers, and banks like Dubai Islamic
Bank, Ajman Bank, Arab Bank, Mashreq, First Abu Dhabi Bank, etc. with a totally
new perspective.
Moreover, the demand of
hybrid or electric vehicles is increasing tremendously in UAE with the rising
prices of petrol. Thus, financial institutions are offering special automotive
loan for electric vehicle. In order to encourage customers to buy hybrid or
electric vehicles as part of the UAE's Sustainability Vision,
many players established eco-friendly automotive loan solutions. This
has caused the market for ecofriendly auto loans to explode. For instance, recently,
National Bank of Fujairah introduced its Green Auto Loan of up to USD0.27
million for customers desiring to loan eco-friendly vehicles. In addition,
Emirates Islamic also announced a new offer on its sharia-compliant Green
Auto Finance offering for cars financing of up to USD0.41 million. Therefore,
with the rising purchase of automotive loan for electric vehicles owing to the
high prices, the demand of automotive loan will began to rise during the forecast
period in UAE.
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on "UAE Automotive Loan Market"
The UAE Automotive Loan Market is segmented
based on vehicle type, provider type, percentage of amount sanctioned, tenure
and region.
The market is divided into two-wheeler,
passenger car, and commercial vehicle based on vehicle type. Among them, passenger cars have
a significant share followed by commercial vehicle during the forecast period
as the demand of passenger vehicle is high in UAE rather than commercial
vehicles.
Based on the provider type, the market is segmented
into banks, NBFCs (non-banking financial services, OEM (original equipment
manufacturer), others (fintech companies) among which banks has a significant share
due to favorable interest rate offered.
Furthermore, based percentage of amount sanctioned,
the market is segmented into less than 25%, 25-50%, 51-75%, more than 75%. By
tenure, the market is segmented into less than 3 years, 3-5 years, more than 5
years. The market analysis also studies the regional segmentation to devise
regional market segmentation, divided among North Saudi Arabia,
South Saudi Arabia, Central Saudi Arabia.
Key market players in the UAE automotive loan market include:
- Dubai Islamic Bank Public Joint Stock Company
- Al Hilal Bank PJSC
- Emirates NBD Bank PJSC
- Abu Dhabi Commercial Bank PJSC
- Abu Dhabi Islamic Bank Public Joint Stock Company
- Ajman Bank PJSC
- Arab Bank Group
- The National Bank of Ras Al Khaimah PJSC
- Dunia Finance LLC
- Reem Finance P.J.S.C.
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“The
demand of automotive loan is rising with the rising demand of privately own
passenger cars. UAE's automotive loan market is also driven by
increased demand for automobiles, flexible lending options, and growth in
online automotive loan aggregators. Moreover, the interest rate offered on
automotive loan is quite low which is also driving the automotive loan industry
in UAE. In the UAE, most buyers opt for an automotive loan because
an individual doesn't have to put up anything as collateral and the car itself
serves as your collateral which is also driving the automotive loan in UAE.’’ said Mr. Karan Chechi, Research Director
with TechSci Research, a research-based global management consulting firm.
“UAE Automotive Loan Market Segmented By Vehicle
Type [Two-Wheeler, Passenger Car, Commercial Vehicle], By Provider Type [Banks,
NBFCs (Non-Banking Financial Services, 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 UAE 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 UAE automotive
loan market.
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