Auto finance markets to double to 2.6 trillion, says EY. Click here to know more

Domestic auto market, one of the most advanced market in Asia, with 74 per cent penetration and with good asset quality of under 1 per cent bad loans, is expected to double its asset base to 2.6 trillion by the year 2020, as per the Ernst & Young's recent report.

According to EY, domestic auto finance market may grow at compound annual growth rate (CAGR) of 13 per cent by value between 2016 to 2026 to reach USD 300 billion. Adding to that, the vehicle penetration is expected to rise by 50 per cent. This will be primarily driven by 70-80 per cent penetration with original equipment manufacturers which is even higher than overall market, majorly due to the innovative products and effective campaigns.

As per the reports of auto finance, the industry is expected to grow by 3-5 per cent annually, in terms of ticket size of cars and the growth in finance penetration from 74 to ~80 per cent for the market. This expansion will be a result of the massive growth in consumption, which is expected to rise by 2.5 times by 2025. It is expected that consumers may want to buy cars out off their budget. If attractive finance schemes are available considering the current growth, we can expect good products in future.