Press release
Vietnam Auto Finance Market to Reach USD 12.82 Billion by 2030, Driven by Economic Recovery and Rising Demand for Automotive Loans
Despite these challenges, the Vietnam auto finance market is poised for a robust recovery, with moderate growth anticipated in 2025 and 2026. According to Makreo Research, the industry is expected to witness double-digit CAGR growth over the next five years, supported by economic recovery, policy reforms, and growing demand for automotive loans.
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Vietnam Auto Finance Market Size and Forecast (2019-2030) - Analysis By Type of Vehicle Financed, Lender Type, Loan Type, Loan Tenure, and Opportunities
https://www.makreo.com/report/vietnam-auto-finance-market-size-and-forecast-2019-2030
► Consumer Credit Growth and Policy Reforms Enhancing Accessibility
The Vietnamese government has introduced several financial reforms aimed at increasing financial inclusion and improving access to credit. According to data from the State Bank of Vietnam, outstanding loans for consumer and life purposes have surged to 2.8 quadrillion VND, representing 20% of the country's total credit.
Key Highlights of Circular No. 12/2024/TT-NHNN:
• Loan Flexibility: Loans of up to 100 million VND can now be granted without requiring a detailed financial plan from customers.
• Increased Accessibility for Rural Borrowers: Access to borrowing has been improved for individuals in rural areas and those with lower income levels.
► Challenges Facing Vietnam's Auto Finance Market
• High Non-Performing Loan (NPL) Rates:
Around 50% of NPLs in the sector are tied to vehicle pawning, creating substantial financial strain.
• Debt Collection Struggles:
- Borrowers often default by pawning their vehicles, making repayments more challenging.
- Smaller banks are under additional pressure due to stringent capital adequacy regulations and increasing household debt.
• Intensified Market Competition:
- The market is moderately consolidated, but remains highly competitive, with significant players such as VIB Bank and Toyota Financial Services driving innovation.
- Competitive strategies like lower interest rates, flexible terms, and promotional offers attract customers but squeeze profitability due to narrowing margins and rising operational costs.
► Continued Decline in Domestic Consumption Weighs on Auto Finance Market
Despite aggressive discounting and promotional efforts from automotive companies, sluggish vehicle sales persist as 2024 unfolds, highlighting the ongoing economic challenges within the automotive sector.
Digital Transformation Driving Growth in Vietnam's Auto Finance Market
To keep pace with changing market demands, Toyota Financial Services Vietnam (TFSVN) has partnered with Singapore-based AND Solutions Pte., Ltd. for a transformative digital overhaul. This collaboration aims to improve financial services and elevate the customer experience in the Vietnamese auto finance industry.
► Key Innovations by AND Solutions:
• NIKO: An AutoML platform that streamlines machine learning processes for predictive insights.
• Looms: A loan origination and management system designed to optimize the loan workflow from end to end.
• Custom Credit Scoring: A tailored solution to enhance decision-making through improved credit risk management.
► Growth Outlook for the Vietnam Auto Finance Market
The Vietnam auto finance market is projected to grow significantly, reaching USD 6.45 billion by 2024 and USD 12.82 billion by 2030, driven by a CAGR of 12.12%.
Key Growth Drivers:
• Expanding Middle Class: By 2026, Vietnam's middle-class population is expected to double to 26%, spurring increased demand for car financing.
• Economic Recovery: Stabilizing interest rates and gradual economic improvements will bolster consumer confidence and lending activities.
• Technological Advancements: Digital solutions will enhance accessibility and efficiency across the auto financing process.
Makreo Research's recently released report titled "Vietnam Auto Finance Market Size and Forecast (2019-2030) - Analysis by Vehicle Type, Lender Type, Loan Type, Loan Tenure, and Opportunities" offers a comprehensive analysis of the historical, current, and future performance of the Vietnam auto finance market. The report identifies key factors driving growth and examines the influence of Vietnam's economy, policies, geography, and demographics. It also evaluates the performance of Vietnam's automotive sector and financial system, focusing on various market segments and profiling key players in the competitive landscape.
Additionally, the report provides insights into the challenges and opportunities within the market, offering stakeholders valuable information to guide investment and strategic decision-making.
For further details on the report's coverage and a comprehensive TOC:
Vietnam Auto Finance Market Size and Forecast (2019-2030)
https://www.makreo.com/report/vietnam-auto-finance-market-size-and-forecast-2019-2030
► Period of Study:
2019 - 2023: Past and Current Scenario
2023: Base Year
2024 - 2030: Future Outlook
► Market Segmentation:
• By Type of Vehicle Financed
• By Lender Type
• By Loan Type
• By Loan Tenure
Companies Covered:
• Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)
• Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcom Bank)
• Vietnam Joint Stock Commercial Bank For Industry And Trade (VietinBank)
• Vietnam Technological And Commercial Joint-stock Bank (Techcombank)
• Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)
• Tien Phong Commercial Joint Stock Bank (TPBank)
• Vietnam International Commercial Joint Stock Bank (VIB)
• Toyota Finance Vietnam Company Limited (TFSVN)
• FE Credit
• Home Credit Vietnam Finance Company Limited
• HD SAISON Finance Co., Ltd.
While 2023 presented significant challenges for Vietnam's auto finance market, the groundwork for recovery and growth is firmly in place. With strategic policy reforms, technological advancements, and an expanding middle class, the sector is poised for promising growth in the coming years.
How Makreo Research Can Assist:
Makreo Research & Consulting is a leading provider of market intelligence and consulting services, offering actionable insights and strategic solutions to stakeholders in the auto finance sector. With a deep understanding of industry dynamics, Makreo helps businesses address challenges like non-performing loans, competitive pressure, and evolving customer expectations. Through comprehensive market studies, risk analysis, and tailored growth strategies, Makreo enables businesses to capitalize on opportunities in areas such as digital transformation and regulatory changes.
By leveraging data-driven insights, Makreo empowers businesses to make informed decisions, optimize operations, and achieve sustainable growth in the evolving auto finance market.
Related Reports: South East Asia Auto Finance Market Reports
Philippines Auto Finance Market Size and Forecast (2019-2029)
https://www.makreo.com/report/philippines-auto-finance-market-size-and-forecast-2019-2029
Indonesia Auto Finance Market Size and Forecast (2019-2029)
https://www.makreo.com/report/indonesia-auto-finance-market-size-and-forecast-2019-2029
Makreo Research and Consulting
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Contact us:
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Email Address
info@makreo.com
Makreo Research, a top global market research and consulting firm, specializes in Syndicated Research, Custom Research, Consulting, and Market Surveys. Serving both domestic and international markets across developed and developing economies, we provide tailored insights to help businesses thrive amid complex global dynamics. Our client-centric approach ensures satisfaction by delivering context-rich market trends and strategies. Additionally, our Commercial Due Diligence services support investors and stakeholders in making informed decisions regarding acquisitions, mergers, and investments. Partner with Makreo Research to gain a competitive edge and confidently navigate today's dynamic business landscape.
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