Studies reveal that the gross bank auto lending in the year 2018 is going to increase by $93 billion in the five Southeast Asian Countries. Experts say that the economic environments these days are favorable, and it is also affecting the purchasing power of consumers. Hence, the auto lending services in the banks are availing sustainable growth in South East Asia. It is observed that Vietnam and the Philippines presented the highest growth rate in auto lending from the year 2011 to 2016.
If we consider the stats obtained from the year 2016 to 2018, the bank auto lending for the individual consumers has improved by 7% compound annual growth rate in the 5 emerging southeast Asian markets. The list includes Vietnam, Thailand, Malaysia, Indonesia, and the Philippines. However, this growth rate is believed to sustain after the year 2018 due to several reasons such as low auto finance penetration rates, low car ownership rates, growing lifestyle of middle-class families, and increasing consumer purchase powers with higher economic growth.
Experts say that the rise of ride-sharing services has created a competitive environment for auto financing companies these days. Banks in Vietnam and the Philippines are growing well in the auto lending market, and this growth is expected to sustain for the next 2 years. On the other side, Malaysia is considered as a country with highest car ownership rate that is showing largest share for auto lending in the market these days. But the growth rate for the year 2016 and 2018 is observed to be 2% only, and the estimated decay was from 46% to 42% in these two years. However, the growth rate in Vietnam is observed to rise by 6% in the year 2018 as compared to the 4% growth rate in 2016.
It is also true that most of the buyers these days are attracted to the used car market, so banks are also focusing on serving such type of clients. This has changed the market scenario and the interest rates as well. Whether in terms of new cars or used cars; people are shifting from motorcycles to four-wheelers. Irrespective of the air quality and traffic congestion issues; cars have become a status symbol for most people these days. That is why banks are also lowering the interest rates to attract more buyers and to enjoy more profits. The auto lending market is expected to grow ahead by a great extent.