Indonesia Car Finance Market by Type of car financed (New and Used cars), by Loan Tenure (1 Year, 2 Years, 3 Years, 4 Years and 5 Years), by Type of financial institution (Commercial Banks and Non Banking Financial Institutions), by Market share of Major companies (Astra Sedaya Finance, BCA Finance, Oto Multiartha, Mandiri Tunas Finance, Toyota Astra Financial Services, Adira Dinamika Multi Finance, Dipo Star Finance, CIMB Niaga Auto Finance etc)
- The Indonesia car finance market is dominated by multi finance companies which majorly cater to the middle class population. Multi finance companies today offer convenient facilities with online presence which has reduced documentation, digital installment payment system and simpler procedure.
- The market has witnessed stringent government regulations in terms of adhering to the minimum capital requirements, revision of down payments requirements and submitting financial report
Indonesia car finance market is in the growing stage. There are around 200 multi finance companies in Indonesia. Indonesia Car Finance Market is driven by increase in sale of passenger cars, inflated ticket size and increased penetration rate. Passenger vehicle segment of the Indonesia’s automotive industry is estimated to grow at a CAGR of 6.8% from 2016 to 2020. The low cost green car segment (LCGC) is expected to experience the fastest growth at CAGR 8.1% from 2016 to 2020. Furthermore, with the proportion of Indonesians living in urban areas expected to reach 71% by 2030, significant infrastructure development is expected in the coming years which will lead to growing working age population and surged the sale of passenger cars.
The number of middle-class and affluent consumers in Indonesia is expected to double to 141 million by 2020. Moreover, with 88.1% of Muslims in Indonesia, Sharia finance has huge potential. Furthermore, OJK targets to triple the market share by 2023 through various strategies, such as the reduction of fees on Sharia-compliant banking products and the development of educational and training programs. Furthermore, banks and other financial institutions are putting their best effort in promoting their consumer finance products and increase the finance penetration in the coming years. The accessibility to finance is expected to grow with an increase in the number of multi finance companies in the market. While more savvy consumers and stricter regulations could curb short-term credit growth, the spread of fintech which use innovative technology in financial services could deliver a new range of customers to multi-financing firms. Fintech can improve consumer financing by public relations campaigns facilitating broader reach as well as increasing credit profiling and providing a different approach to risk management.
Ken Research in its latest study, Indonesia Car Finance Market by Type (New and Used Passenger and Commercial Cars), by Tenure of Loan, by Banks, Captive and Non Captive Institutions – Outlook to 2021 suggests that Astra Sedaya Finance, BCA Finance, Oto Multiartha, Mandiri Tunas Finance, Toyota Astra Financial Services, Adira Dinamika Multi Finance, Dipo Star Finance will remain the major car finance companies in this space. However, these major players will witness rising competition from small regional players due to low entry barriers.
Some captive finance company only focuses on new car financing, such as Toyota Astra which restricts their profitability compared to that of their peers that engage in new and used car financing. Owing to Indonesia’s lowest bankable population in the world (at 36% of the country’s adult population), these captive units will have a higher potential to expand in future
Indonesia Car Finance Market is projected to register a positive CAGR during the period 2016-2021. Geographical expansion, digital technology, savvy customers and favorable government regulations is expected to drive the Indonesia Car Finance Market in the future.
The report provides information on market size of the Indonesia Car Finance Market, market segmentation on the basis of type of car financed, tenure of loan and type of financial institution.
Key Topics Covered in the Report:
Indonesia Car Finance Market Size
Number New Cars Financed Indonesia
Number of Used Cars Financed Indonesia
Credit Disbursed New Cars Indonesia
Credit Disbursed for Used Cars Indonesia
Tenure of Loan for New, Used Cars Indonesia
Product Features in Car Finance in Indonesia
Value Chain for Car Finance in Indonesia
Trends and Developments in Car Finance Indonesia
Government Regulations in Car Finance Indonesia
Future Outlook for Car Finance Indonesia
Competition Car Finance Indonesia
Top Car Finance Companies in Indonesia
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