Report Overview

Asia Pacific Used Car Financing Market – Industry Trends & Forecast Report, 2030

The Asia Pacific Used Car Financing Market size was estimated at USD 37.21 billion in 2023. During the forecast period between 2024 and 2030, the Asia Pacific Used Car Financing Market size is projected to grow at a CAGR of 8.77% reaching a value of USD 76.89 billion by 2030. Prominent drivers of the market are the increasing demand for affordable cars and the ease of obtaining financing. Across the Asia Pacific region, the used car financing sector has experienced notable growth, with a presence observed across South Asian countries. Various players, including small NBFCs, OEMs, and private banks, offer diverse options for obtaining financing for used cars. The market for used cars in these countries is characterized by fragmentation, with numerous OEMs, auction houses, and pre-owned dealers aiming to expand their inventory to provide customers with a wide array of financing choices. A significant portion of consumers opting for car purchases with financial assistance tend to rely on available financing services, primarily due to the accessibility of used car financing options, which typically range between 13–15% in cost. This presents a substantial opportunity for both manufacturers and financial institutions. Notably, in countries like India, the used car market is approximately 1.3 times larger than the new car market, indicating promising prospects for the market.

Used Car Financing – Overview

Used car financing refers to the process of obtaining financial assistance or loans to purchase pre-owned vehicles. It involves securing funds from various sources such as banks, credit unions, financial institutions, or dealerships to facilitate the purchase of a used car. Used car financing options typically involve terms and conditions regarding interest rates, repayment schedules, and eligibility criteria based on factors such as credit history, income, and the value of the vehicle being purchased. These financing arrangements enable individuals to affordably acquire a used vehicle while spreading the cost over time through installment payments.

Asia Pacific Used Car Financing Market

Growth Drivers

Rising Car Ownership Rates

The Asia Pacific region has witnessed a significant surge in car ownership rates, reflecting a profound transformation in transportation dynamics. Statistical data reveals a steady increase in motor vehicle ownership per capita, particularly two-and three-wheelers, alongside passenger cars. Notably, low and lower-middle-income economies have experienced remarkable growth in vehicle ownership, propelled by rising per capita incomes and infrastructural advancements. Furthermore, the shifting commuting patterns, with private vehicle ownership surpassing public transport registrations, signify a notable transition in transportation preferences. This trend underscores the evolving landscape of mobility in the region, necessitating strategic planning and investment to address associated challenges effectively. For instance, China's strategy to boost domestic consumption includes subsidies aimed at upgrading vehicles, contributing to a surge in car ownership rates. With 435 million motor vehicles in China by 2023, including 336 million cars and trucks, the nation witnesses a steady rise in vehicle ownership. The burgeoning number of vehicles, coupled with government incentives, fuels the growth of the used car market. In 2022, 18.41 million motor vehicles were exchanged in this market, signaling its increasing significance in the automotive landscape. This trend reflects the changing dynamics of car ownership and consumer behavior in China.

Challenges

Volatility in Used Car Prices

The fluctuating prices of used cars pose a significant challenge to the growth of Asia Pacific Used Car Financing Market. Volatile car prices can create uncertainty for both buyers and lenders, impacting their willingness to engage in financing transactions. Factors such as changes in market demand, vehicle condition, and economic conditions can contribute to this price instability. Consequently, potential buyers may hesitate to commit to purchasing a used car, while lenders may be more cautious in offering financing options. This restraint on the market limits its growth potential and requires innovative strategies to mitigate the impact of price volatility on used car financing transactions.

Impact of Escalating Geopolitical Tensions on Asia Pacific Used Car Financing Market

Intensifying geopolitical tensions can have a multifaceted impact on the Asia Pacific Used Car Financing Market. Japan's decision to restrict most used-car sales to Russia, prompted by geopolitical factors and reinforced by sanctions, has abruptly halted a trade valued at nearly USD 2 billion annually. This move has disrupted established channels for exporting popular brands like Toyota, Honda, and Nissan, significantly altering market dynamics. Consequently, brokers and dealers are scrambling to redirect vehicles to alternative markets in regions like New Zealand, Southeast Asia, and Africa. While these shifts present challenges, they also bring opportunities, such as lower prices benefiting both consumers and businesses within the sector. As the landscape evolves, stakeholders are closely monitoring the unfolding implications of these geopolitical maneuvers on the used car financing market in the Asia Pacific region.

Asia Pacific Used Car Financing Market

Segmental Coverage

Asia Pacific Used Car Financing Market – By Body Style Type

Based on body style type, Asia Pacific Used Car Financing Market is divided into Hatchbacks, Sedans, Sports Utility Vehicles (SUVs), and Multipurpose Utility Vehicles (MUVs) segments. The hatchbacks segment holds the highest share in the Asia Pacific Used Car Financing Market by body style type. Their affordability has ensured sustained demand, even during the pandemic. Hatchbacks offer comparable performance and comfort to sedans at a lower tax rate, further propelling their popularity. This trend mirrors the new car market, attracting major international automakers to invest in compact car models. As digital car buying expands and value-added services increase, the used car market, particularly hatchbacks, is expected to experience further growth, fueled by the growing availability of financing options.

Asia Pacific Used Car Financing Market – By Financier

Based on financier, the Asia Pacific Used Car Financing Market is divided into OEMs, Banks, and Non-Banking Financing Companies (NBFCs) segments. The banks segment holds the highest share in the Asia Pacific Used Car Financing Market by financier segments. They currently control around 40% of the used commercial vehicle segment and are strategically expanding into the pre-owned car market to further increase their profit margins. Leveraging their access to low-cost funds and extensive branch networks, leading banks like Axis Bank, HDFC Bank, ICICI Bank, and YES Bank are partnering with online platforms like Rupyy to streamline used car loan offerings. Despite challenges in accurately valuing pre-owned vehicles, banks are capitalizing on the surging demand by providing competitive interest rates and tailored loan options. However, their ability to capture an even larger market share depends on building robust dealer networks and implementing effective strategies for acquiring new business. Meanwhile, the OEM segment is expected to witness the fastest growth rate during the forecast period. Traditionally fixated on new vehicle sales, OEMs are now recalibrating their strategies to tap into the lucrative used cars market. This strategic pivot reflects a broader industry acknowledgment of the substantial revenue potential inherent in pre-owned vehicles. By diversifying their offerings to include used cars, OEMs not only enhance brand visibility but also foster brand loyalty among a wider consumer base. To capitalize on this paradigm shift, OEMs are leveraging advanced software solutions to streamline their acquisition processes for used car inventory. This proactive approach ensures that OEMs remain at the forefront of market dynamics, poised to capitalize on emerging opportunities and sustain robust growth in the forecast period

Asia Pacific Used Car Financing Market – By Country

The in-depth research report on the Asia Pacific Used Car Financing Market covers the market in the region’s major countries including China, India, Japan, South Korea, Australia & New Zealand, Indonesia, Malaysia, Singapore, Vietnam, and Rest of APAC. India holds the highest share in the Asia Pacific Used Car Financing Market and is expected to maintain its dominance during the forecast period. It is primarily due to the surge in used car sales, driven by their cost-effectiveness compared to new vehicles. Accessible financing options have bolstered this growth, fostering a steady rise in demand for used car financing. The increasing adoption of digital technologies is a significant catalyst for this market. Digitization streamlines data management processes, reducing resource allocation and document storage challenges. As auto finance embraces digitization, opportunities abound for comprehensive digital solutions, including e-signatures and digital loan documentation, positioning players to gain a competitive edge in the market.

Competitive Landscape

Major players operating in Asia Pacific Used Car Financing Market include The Bank of China, HDFC Bank Ltd, Cholamandalam Investment and Finance Company Limited, Sundaram Finance Ltd, Bajaj Finserv, Mahindra Finance, Sumitomo Mitsui Banking Corporation Group, Korea Development Bank, Chandgan Auto Finance Co. Ltd, Ford Motor Credit Company, and BYD Auto Finance Company Limited. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In March 2024 - Hyundai Motor Company ventured into the domestic certified used car market in South Korea.

Scope of the Report

By Body Style Type

• Hatchbacks

• Sedans

• Sports Utility Vehicles (SUVs)

• Multipurpose Utility Vehicles (MUVs)

By Financier

• OEMs

• Banks

• Non-Banking Financing Companies (NBFCs)

By Country

• China

• India

• Japan

• South Korea

• Australia & New Zealand

• Indonesia

• Malaysia

• Singapore

• Vietnam

• Rest of APAC

1. Research Framework
   1. Research Objective
   2. Solution Overview
   3. Market Segmentation
2. Executive Summary
3. Asia Pacific Used Car Financing Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Growing Used Car Market
         2. Rising Car Ownership Rates
         3. Fintech and NBFCs
      2. Restraints
         1. Economic Fluctuations
         2. Used Car Price Volatility
      3. Opportunities
         1. EV Financing
         2. Untapped Markets
         3. increasing Digitalization
      4. Challenges
         1. Creditworthiness Assessment
         2. Fraudulent Practices
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. Asia Pacific Used Car Financing Market, Pricing Analysis
5. Asia Pacific Used Car Financing Market: Marketing Strategies
6. Asia Pacific Used Car Financing Market Overview
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Body Style Type
         1. Hatchbacks
         2. Sedans
         3. Sports Utility Vehicles (SUVs)
         4. Multipurpose Utility Vehicles (MUVs)
      2. By Financier
         1. OEMs
         2. Banks
         3. Non-Banking Financing Companies (NBFCs)
      3. By Country
         1. China
         2. India
         3. Japan
         4. South Korea
         5. Australia & New Zealand
         6. Indonesia
         7. Malaysia
         8. Singapore
         9. Vietnam
         10. Rest of APAC
7. China Used Car Financing Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Body Style Type
      2. By Financier
8. India Used Car Financing Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Body Style Type
      2. By Financier
9. Japan Used Car Financing Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Body Style Type
      2. By Financier
10. South Korea Used Car Financing Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Body Style Type
       2. By Financier
11. Australia & New Zealand Used Car Financing Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Body Style Type
       2. By Financier
12. Indonesia Used Car Financing Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Body Style Type
       2. By Financier
13. Malaysia Used Car Financing Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Body Style Type
       2. By Financier
14. Singapore Used Car Financing Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Body Style Type
       2. By Financier
15. Vietnam Used Car Financing Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Body Style Type
       2. By Financier
16. Rest of APAC Used Car Financing Market
    1. Market Size & Forecast, 2019–2030
       1. By Value (USD Billion)
    2. Market Share & Forecast
       1. By Body Style Type
       2. By Financier
17. Competitive Landscape
    1. List of Key Players and Their Offerings
    2. Asia Pacific Used Car Financing Company Market Share Analysis, 2023
    3. Competitive Benchmarking, By Operating Parameters
    4. Key Strategic Developments (Mergers, Acquisitions, Partnerships, etc.)
18. Impact of Escalating Geopolitical Tensions on Asia Pacific Used Car Financing Market
19. Company Profiles (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, and SWOT Analysis)
    1. The Bank of China
    2. HDFC Bank Ltd
    3. Cholamandalam Investment and Finance Company Limited
    4. Sundaram Finance Ltd
    5. Bajaj Finserv
    6. Mahindra Finance
    7. Sumitomo Mitsui Banking Corporation Group
    8. Korea Development Bank
    9. Chandgan Auto Finance Co. Ltd
    10. Ford Motor Credit Company
    11. BYD Auto Finance Company Limited
    12. Other Prominent Players
20. Key Strategic Recommendations
21. Research Methodology
    1.    Qualitative Research
       1.  Primary & Secondary Research
    2.    Quantitative Research
    3.    Market Breakdown & Data Triangulation
       1.  Secondary Research
       2.  Primary Research
    4.    Breakdown of Primary Research Respondents, By Country
    5.    Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable

List of Figures

Figure 1    Asia Pacific Used Car Financing Segmentation                    
Figure 2    Asia Pacific Used Car Financing Market Value Chain Analysis                
Figure 3    Company Market Share Analysis, 2023                        
Figure 4    Asia Pacific Used Car Financing Market Size, By Value (USD Billion), 2019–2030    
Figure 5    Asia Pacific Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 6    Asia Pacific Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 8    Asia Pacific Used Car Financing Market Share, By Country, By Value (USD Billion), 2019–2030
Figure 9    China Used Car Financing Market Size, By Value (USD Billion), 2019–2030        
Figure 10    China Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030    
Figure 11    China Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 13    India Used Car Financing Market Size, By Value (USD Billion), 2019–2030        
Figure 14    India Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030    
Figure 15    India Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 17    Japan Used Car Financing Market Size, By Value (USD Billion), 2019–2030        
Figure 18    Japan Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030    
Figure 19    Japan Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 21    South Korea Used Car Financing Market Size, By Value (USD Billion), 2019–2030    
Figure 22    South Korea Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 23    South Korea Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 25    Australia & New Zealand Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Figure 26    Australia & New Zealand Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 27    Australia & New Zealand Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 29    Indonesia Used Car Financing Market Size, By Value (USD Billion), 2019–2030    
Figure 30    Indonesia Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 31    Indonesia Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 33    Malaysia Used Car Financing Market Size, By Value (USD Billion), 2019–2030        
Figure 34    Malaysia Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 35    Malaysia Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 37    Singapore Used Car Financing Market Size, By Value (USD Billion), 2019–2030    
Figure 38    Singapore Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 39    Singapore Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 41    Vietnam Used Car Financing Market Size, By Value (USD Billion), 2019–2030        
Figure 42    Vietnam Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 43    Vietnam Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
Figure 41    Vietnam Used Car Financing Market Size, By Value (USD Billion), 2019–2030        
Figure 42    Rest of APAC Used Car Financing Market Share, By Body Style Type, By Value (USD Billion), 2019–2030
Figure 43    Rest of APAC Used Car Financing Market Share, By Financier, By Value (USD Billion), 2019–2030
 

List of Tables

Table 1    Asia Pacific Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 2    Asia Pacific Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 3    Asia Pacific Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 5    Asia Pacific Used Car Financing Market Size, By Country, By Value (USD Billion), 2019–2030
Table 6    China Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 7    China Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 8    China Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 10    India Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 11    India Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 12    India Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 14    Japan Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 15    Japan Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 16    Japan Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 18    South Korea Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 19    South Korea Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 20    South Korea Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 22    Australia & New Zealand Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 23    Australia & New Zealand Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 24    Australia & New Zealand Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 26    Indonesia Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 27    Indonesia Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 28    Indonesia Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 30    Malaysia Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 31    Malaysia Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 32    Malaysia Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 34    Singapore Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 35    Singapore Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 36    Singapore Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 38    Vietnam Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 39    Vietnam Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 40    Vietnam Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 38    Rest of APAC Used Car Financing Market Size, By Value (USD Billion), 2019–2030
Table 39    Rest of APAC Used Car Financing Market Size, By Body Style Type, By Value (USD Billion), 2019–2030
Table 40    Rest of APAC Used Car Financing Market Size, By Financier, By Value (USD Billion), 2019–2030
Table 41    The Bank of China Company Overview
Table 42    The Bank of China Financial Overview
Table 43    HDFC Bank Ltd Company Overview
Table 44    HDFC Bank Ltd Financial Overview
Table 45    Cholamandalam Investment and Finance Company Limited Company Overview
Table 46    Cholamandalam Investment and Finance Company Limited Financial Overview
Table 47    Sundaram Finance Ltd Company Overview
Table 48    Sundaram Finance Ltd Financial Overview
Table 49    Bajaj Finserv Company Overview
Table 50    Bajaj Finserv Financial Overview
Table 51    Mahindra Finance Company Overview
Table 52    Mahindra Finance Financial Overview
Table 53    Sumitomo Mitsui Banking Corporation Group Company Overview
Table 54    Sumitomo Mitsui Banking Corporation Group Financial Overview
Table 55    Korea Development Bank Company Overview
Table 56    Korea Development Bank Financial Overview
Table 57    Chandgan Auto Finance Co. Ltd Company Overview
Table 58    Chandgan Auto Finance Co. Ltd Financial Overview
Table 59    Ford Motor Credit Company Overview
Table 60    Ford Motor Credit Company Financial Overview
Table 61    BYD Auto Finance Company Limited Company Overview
Table 62    BYD Auto Finance Company Limited Financial Overview