The competition in the Qatar Auto Finance Market is concentrated with dominance of few major local banks operating in the country. The major lending institution types in the market are Banks, Captives and Non-Banking Financial Companies. Banks hold a majority share in the lending space for new vehicles and the used vehicle segment. Some of the leading banking institutions include Qatar National Bank, Commercial Bank of Qatar, Qatar Islamic Bank, Doha Bank, Masraf Al Rayan, etc. Captives fail to provide any significant competition to the banks and have very small presence in the market. Some of the Captives operating in Qatar include Toyota Motor Credit Corporation, Nissan Motor Acceptance Corporation and Ford Motor Credit Corporation. Non-Banking Financial Companies too only have a marginal representation in the market with only First Finance Co. and Al Jazeera Finance operating in the market to finance vehicles in Qatar. Parameters on the basis of which companies compete in the market include interest rate and down payment ratio, loan tenure, digitalization and ease of transaction, customer reach or branch network, service portfolio and others.
Digitalization Of Qatar Auto Finance
The Digital based Vehicle Finance model looks to increase convenience and reduce the number of stakeholders in the market to provide a streamlined lending experience for the borrowers. It relies on the reach of internet technology to increase awareness among the end users in the market. The process today, begins on a web browser window, when the borrower researches potential vehicles, dealers providing the preferred vehicle, financing options and financing outlets. The borrower can sort out financing of the vehicle before deciding his final purchase, by applying for preapproval online at a lender’s website. All of this is done before contacting the dealership or the lender. Once the borrower is in contact with the dealership, the process follows a similar path to the traditional model and ends, when the vehicle is delivered. But with the ever increasing level of technology and aspects such as CRM, Marketing, and Payments being integrated digitally, the scope of incorporating digitalization into the vehicle financing process seems to be limitless.
The complication of the loan process, increasingly long negotiations at the dealerships and lengthy paperwork, resulted in ‘decision fatigue’ which mandated the introduction of digital auto lending in the market.
Qatar Auto Finance Market Future Outlook And Projections
Over the forecast period, Qatar Auto Finance market is expected to grow at a positive rate owing to rising demand for new and used vehicles in the country, owing to emergence of new businesses, increasing personal disposable income and expected increase in tourist inflow. Multiple fin-tech startups are also expected to enter the landscape which poses a threat to conventional finance companies and banks. These start ups would primarily work towards developing products to augment the digitalization of the banking sector. This includes digital payments, online lending, online aggregation and remote banking facilities which made customer lending process uncomplicated and simple, further facilitating the vehicle finance market in the country. Banks and Captives are expected to increase their share in the market particularly in the used cars segment.
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