Grand View Research has released a new report that predicts that the international automotive finance market will climb to $344.1 billion by 2026. However, the impressive figure does not necessarily represent astronomical growth, and corresponds to a modest CAGR of 6.7 percent.
The automotive finance market covers the ecosystem of financial providers that allow everyday consumers to lease and purchase motor vehicles, whether through a loan or some other kind of financing arrangement. Grand View is anticipating that the market will grow as car ownership becomes more common and new technologies make vehicles more expensive.
Banks will account for the biggest share of the market revenue, especially since they make direct financing more readily available. However, the leasing segment is expected to display the highest CAGR, largely because it allows consumers to drive more advanced cars with better safety and entertainment features without having to pay the entire cost of the vehicle.
Europe, meanwhile, will be the largest region for automotive financing. According to Grand View, the area has been an early adopter of technologies like biometrics, e-contracts, and machine learning, all of which have led to the formation of a more robust financial environment. Those technologies make the financing process more organized and more secure, and allow financial institutions to offer better risk-based pricing models.
Grand View identified the Toyota Motor Credit Corporation, the Ford Motor Credit Company, Daimler Financial Services, and GM Financial as some of the largest players in the automotive financing space. Unsurprisingly, all of those companies have direct ties to some of the world’s leading automotive manufacturers.
The Grand View report arrives shortly after CES, where several companies demoed smart car prototypes with a slew of innovative features. ArcherMind and Samsung showed off new connected cockpits, while Mercedes showcased a concept car based on the Avatar franchise.