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Philippines Auto Finance Market Outlook to 2024

Growing Prominence of Captive Finance and Surge in Used Car Sales Supporting Disbursement for Auto Loans

Region:Asia

Author(s):Aditya

Product Code:KR946

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Published On

January 2020

Total pages

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About the Report

Click here for Updated Report:- Philippines Auto Finance Market Outlook to 2026

Analysts at Ken Research in their latest publication Philippines Auto Finance Market Outlook to 2024- Growing Prominence of Captive Finance and Surge in Used Car Sales Supporting Disbursement for Auto Loans believe that the market demand is likely to follow a growth trend in the near future due to a forthcoming increase in used cars sales and a shift towards newer models of mobility such as car sharing and leasing, which will in turn help the economy grow as well. The Report provides a comprehensive analysis of Philippines’ auto finance market including market evolution, market overview, market genesis, and Market size and market segmentations. Extensive focus has been placed in quantifying the auto credit disbursed auto loans outstanding and number of vehicles financed. The report covers aspects such as market segmentation (by loan tenure, type of vehicles, new and used cars and type of institutions) and a snapshot of the general automotive space in the Philippines Some positive factors expected to impact the market are the influx of digitization based lending models (introduction of fin-tech products), the spread of customized loan products and a further rise in the penetration rate of banks and Non-Bank finance. The market is anticipated to register a positive CAGR of 9.0% in terms of credit disbursed and 8.1% in terms of total loan outstanding during the forecasted period 2019P-2024F.

Philippines Auto Finance Market Overview and Size

Market Overview: The auto finance market has played an imperative role in the overall GDP (Constant Prices) contribution in the Philippine economy with a value contribution of more than 25% in terms of auto loan outstanding by the end of 2019 (Provisional). The Auto Finance Market in Philippines is fairly new and has not been able to penetrate the country. There is a lack of knowledge and awareness in the country which leads to the problem of people opting for cash purchases, in place of finance payments.

Major operations are conducted by two types of entities namely, Banks & Subsidiaries and Non Bank Financial Institutes. The only captive finance working in the country is Toyota Financial Services Philippines and other than that there is a lack of Captive finance institutions.

Philippines auto finance market size in terms of auto loan outstanding increased with a double digit CAGR during the same period. The growth factors include lowering lending rates, growth in new & used car sales, expanding household population and higher demand in the urban regions along with progressive technological advancements being mandated by the government and the adoption of digitalization by all major financial institutions in the country.

Two-wheelers market witnessed growth with the rise in motorcycle fueled by the huge demand by small industry workers and rural business. Constant prime lending rates, growing car sales and evolving used car market have been the major push factors.

Philippine Auto Finance Market Segmentation

By Type of Vehicles Financed: Market segmentation is done on the basis of sales of type of Vehicle financed. It was observed that out of total vehicle financed, new Automobiles capture highest share of the market in 2019P, while used Automobile capture of the overall financed vehicle, and motorcycle captured rest share in terms of units.

By Banks and Non Banks: Philippines Auto finance market is largelygoverned by Banks and banking segment of the market amounted to the overall market. Non banking sector amounted to remaining the market in terms of Auto loan outstanding.

By Banks on the basis of Auto Loans and Motorcycle Loans: In Philippines, it is witnessed that the banks majorly focus upon providing loans to the Automobile segment rather than motorcycle segment. Due to this, auto loan segment of the bank captured highest share of the market and Motorcycle loan amounted to rest of the overall market.

By Non Banks on the basis of Auto Loans and Motorcycle Loans: In Philippines, Non Banking segment do not have a lot of capital and deep pockets, hence they majorly focus on providing loans for Used Automobiles and for motorcycle, as they have lower average price..

By Type of Banking Institutions: There are majorly two types of Banking Institutions in Philippines; Commercial and Thrift banking systems. Commercial banks are big and govern largest share of the banking segment of the market and thrift banking system amounted to rest of the banks share in the market.

By Nature of Vehicle: The market has beendivided in terms of Used and New Vehicle. It is witnessed that in Philippines, majority of the market is governed by new vehicle and it amounted highest share of the overall market.

By Tenure of Loan: In Philippines Auto Finance Market, the Tenure of loan for New Vehicles is divided in 5 sections; 1 Year Loan period amounts to the lowest share on the basis of Auto Loan Disbursement for New Vehicle while remaining share is given to the 0-5 year or more tenure period amounts to the maximum share. For Used cars, the most favorable tenure is said to be for 3 years or more.

By Sales Registration: In Philippines, we witness thatNCR region, have the highest value of sales registration and approximately highest of the total vehicles are registered in this area.

Compeititive Landscape of Philippines Auto Finance Market

The overall competition nature has been fragmented owing to large size of other players in the market. The top 5 entities capture over 50% of the total auto loan outstanding in the banking sector in 2019P. Banks have been the dominant entity in 2019P. Although there are approximately ~entities involved in extending auto finance in Philippines, the market is dominated by banks in terms of auto loans extended owing to low cost of financing and high trust factor associated with their organized & stable business structures. In 2019P, there were 6 major banks namely Metrobank, BDO Unibank, Eastwest Bank, Bank of Philippine Island, Rizal Corporation and Maybank.

The overall competition nature has been highly concentrated owing to major market share captured by 3 big players namely, Toyota Financial Services Philippines Corporation (TFSPH), Unistar Credit & Finance Corporation and Radio Wealth finance Company. Similar scenario has been observed for the year 2019P. The Largest player in this category is TFSPH.

Competing Parameters: These entities majorly compete on the basis of diversification of services; interest rates charged, expanded distribution network & regional presence and enhanced customer relationship. One of the chief competing parameter is digitalization that has completely changed the market along with major strategies used to attract customers & expand business including Cash Your Car and others.

Philippines Auto Finance Market Future Outlook

Future Growth Prospects: The Philippines auto finance market is likely to witness a boom in terms of auto loan outstanding, credit disbursed and number of vehicles financed especially owing to fast pace developments on the technological front with the development of the Eastern Economic Corridor (EEC). Furthermore, the inclusion of many Japanese Auto makers is also supposed to act like a catalyst for the growth. This is expected to increase the number of total vehicles financed in the country. Customers would witness new schemes in the market focusing primarily on customers friendly outlook and enable customers to operate auto loans financial services from home, without any hassle. Moreover, rise in commercial activities engaging automobiles, such as use of vehicles in public transport, agricultural and industrial use, are expected be the potential prospects of growth in the next five years.

Key Topics Covered in the Report

Philippines Auto Finance Market Overview and Genesis
Philippines Auto Finance Market Ecosystem, 2019P
Value Chain Analysis of Philippines Auto Finance Market, 2019P
Philippines Finance Market Value Chain Analysis
Philippines Auto Finance Market Size, 2013-2019P
Philippines Auto Finance Market Segmentation, 20113-2019P
Major Trends and Development in Philippines Auto Finance Market
Regulatory Framework in the Philippines Auto Finance Market
Snapshot On Philippines Automotive Sales And Manufacturing Market, 2014-2019P
Ways to Finance Automotives in Philippines(Bank Finance or Multi Financing Companies, Personal Finance, Lease Financing)
Vendor Selection Process for Auto Finance Company in Philippines
Competitive Landscape containing Company & Product Profiles in the Philippines Auto Finance Market
Financial Penetration of various OEM Brands
Philippines Finance Market Future Outlook and Projections, 2019P-2024
Analyst Recommendations for the Philippines Auto Finance Market

Products

Key Target Audience

Existing Auto Finance Companies
Banks
OEM Dealerships
Captive Finance Companies
Credit Unions
Private Finance Companies
New Market Entrants
Government Organizations
Investors
Auto mobile Associations
Auto mobile OEMs

Time Period Captured in the Report:

Historical Period: 2014-2019P
Forecast Period: 2019P-2024F

Companies

Key Segments Covered:

By Type of Vehicle Financed

New Vehicles
Used Vehicles
Motorcycles

By Banks and Non Banks

Banks (Auto Loans and Motorcycle Loans)
Non Banks (Auto Loans and Motorcycle Loans)

By Type of Banking Institutions

Commercial and Universal Banks
Thrift Banks

By Nature of Vehicles

New Vehicles (Banks and Non Banks)
Used Vehicles (Banks and Non Banks)

By Type of Vehicle Sold

Passenger
Commercial
Motorcycles

By Tenure of Loans

New Vehicle (1 year, 2 Years, 3 Years, 4 years, 5 Years or More)
Used Vehicle (1 year, 2 Years, 3 Years or More)
By Registration of Vehicles

1. Executive Summary

1.1Market Size and overview
1.2Market Segmentation
1.3Competitive Analysis
1.4Future Analysis and Projections

2. Research Methodology

2.1. Market Definitions
2.2. Abbreviations
2.3. Market Size and Modeling
2.4General Approach – Market Sizing
2.5Market Sizing – Philippines Auto Finance Market
2.6Variables (Dependent and Independent)
2.7Multi Factor Based Sensitivity Model
2.8Regression Matrix
2.9Final Conclusion

3. Philippines Auto Finance Market Evolution, 1850-2019P

Genesis of major Institutions, 1850-2019P
Changes in Sector Related Policies & their Effect on Philippines Auto Finance Market, 2011-2019F

4. Philippines Auto Finance Market Overview & Genesis, 2014-2019P

5. Philippines Auto Finance Market Eco-System, 2019P

6. Philippines Auto Finance Market Value Chain Analysis, 2019P

6.1. Online Aggregators
AutoDeal
MoneyMax
Go Bear
6.2. Analysis of Major Entities Involved, Pain Points, Business Strategies and Financing Options Available in Philippines Auto Finance Market, 2019P
Vendor Selection Process in Philippines Auto Finance Market
Major Pain Points of Various Entities In Philippines Auto Finance Market
Major Business Strategies, Company Positioning, Mergers and aquisitions & payment methods, 2019P
Ways To Finance a Car In Philippines Auto Finance Market (Bank Finance Or Multi Financing Companies, Personal Finance, Lease Financing), 2019P
Different Ways To Finance A Car In Philippines Auto Finance Market, 2019P
Prevailing Interest rates in Philippines auto FInance Market, 2019P

7. Philippines Auto Finance Market Size By Auto Loan Disbursed, Auto Loan Outstanding & Number Of Automobiles Financed, 2014-2019P

Auto Sales Slump in 2018

8. Philippines Auto Finance Market Segmentation, 2014-2019P

8.1. By Type of Vehicles Financed (New Automobile Vehicles, used Automobile Vehicles, Motorcycle), 2014-2019P
8.2. By Banks and Non Banks (Auto Loan and Motorcycle Loan), 2014-2019P
By Banks On the Basis of Loan Portfolio (Auto Loan, Motorcycle Loan), 2014-2019P
By Non Banks On the Basis of Loan Portfolio (Auto Loan, Motorcycle Loan), 2014-2019P
8.3. By Type of Banking Institutions (Commercial/Universal Bank, Thrift Banks), 2014-2019P
8.4. By Nature of Vehicles (New and Used), 2014-2019P
By Nature of Vehicle (New Vehicle and used vehicle) on the basis of Loan Facilitating Institutions, 2018 & 2019P
8.5. By Type of Motor Vehicle Sold (Passenger, Commercial and Motorcycle) on the basis of Sales, 2014-2019P
8.6. By Tenure of Loan for New Vehicle and Used Vehicle, 2014-2019P
By Tenure of Loan (1 Year, 2 year, 3 Year, 4 Year and more than 5 Years) on the basis of Auto Loan Disbursement of New Vehicles (Passenger and Commercial Vehicles), 2019P
By Tenure of Loan (1 Year, 2 year, 3year or More ) on the basis of Auto Loan Disbursement of Used Vehicles, 2019P
8.7. By Volumes of New Vehicle Registered under Various Regions, 2019P

9. Trends and Development in Philippines Auto Finance Market, 2019P

Growing Prominance of Captive Finance
Technological Integration and Customized Products
Growth of Used Car Market
Tax Reform for Acceleration and Inclusion (TRAIN) Act
Positively Inclining Interest rates

10. Government Regulations in Philippines Auto Finance Market, 2019P

10.1. Acts Governing Philippines Financial Institutions, 2019P
10.2. License Requirements to Operate as a Financial Institution in Philippines, 2019P
10.3. General Requirement and Documentation Required for a New Car Financing
10.4. Regulatory framework for Multi Finance Companies
10.5. General Requirement and Documentation for Used Car Financing

11. Analysis of OEM Dealers in Philippines Auto Finance Market, 2017-2019P

12. Competition Analysis in Philippines Auto Finance Market, 2019P

12.1. Market Share of Major Entities in Philippines Auto Finance Market, 2018 & 2019P
Market Share of Major Banks, 2018 & 2019P
Market Share of Major Non Banks in Philippines Auto Finance Market, 2018 & 2019P

13. Company Profiles of Major Players in Philippines Auto Finance Market, 2019P

Company Profiles of major Banks and Their Subsidiaries
13.1. MetroBank
13.2. BDO BANK
13.3. Eastwest Bank
13.4. Bank of Philippine Islands (BPI)
13.5. Rizal Commercial Banking Corporation (RCBC)
13.6. Maybank
13.7. Other Banks (China Bank, United Coconut Planters Bank, Security Bank Corporation, Union Bank, Robinsons Bank, The Philippine Bank of Communications & Sterling Bank of Philippines)
Company Profile of Major NBFCs in Philippines Auto Finance Market
13.8. Toyota Financial Services Philippines Corporation (TFSPH)
13.9. Radiowealth Finance
13.10. Unistar Credit and Finance Corporation
13.11. Other NBFCs in the industry (Aeon Credit Service (Philippines) inc, Asia Link Finance Corporation, Leauge one Finance and leasing Corporation, DBP Leasing Corporation, First United Finance and Leasing Corporation),

14. Philippines Auto Finance Market Future Outlook and Projections, 2019P-2024F

14.1. Philippine Auto Finance Market Size (Auto Loan Outstanding, Auto Loan Disbursed & Vehicles Financed), 2019P-2024F
14.2. Future Market Segmentation, 2019P and 2024F
14.2.1. By Type of Vehicles Financed (New Automobile Vehicles, used Automobile Vehicles, Motorcycle), 2019P & 2024F
14.2.2. By Banks and Non Banks (Auto Loan and Motorcycle Loan), 2019P & 2024F
By Banks On the Basis of Loan Portfolio (Auto Loan, Motorcycle Loan), 2019P & 2024F
By Non Banks On the Basis of Loan Portfolio (Auto Loan, Motorcycle Loan), 2019P & 2024F
14.2.3. By Type of Motor Vehicle Sold (Passenger, Commercial and Motorcycle) on the basis of Sales, 2019P & 2024F

15. Analyst Recommendation

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