Europe Automotive Finance Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 31.14 Billion |
| Market Size (2029) | USD 43.13 Billion |
| CAGR (2024 - 2029) | 6.73 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Europe Automotive Finance Market Analysis
The Europe Automotive Finance Market size is estimated at USD 31.14 billion in 2024, and is expected to reach USD 43.13 billion by 2029, growing at a CAGR of 6.73% during the forecast period (2024-2029).
Over the long term, as European consumers increasingly opt for private transportation, buoyed by rising disposable incomes and enticed by financial institutions' attractive programs like car buybacks and OEM warranties, the automotive finance market in Europe is poised for significant growth.
• According to the International Organization of Motor Vehicle Manufacturers (OICA), new passenger car sales in Europe touched 14.9 million units in 2023 compared to 12.63 million units in 2022, representing a Y-o-Y growth of 16.4% between 2022 and 2023.
Moreover, the burgeoning used car market and a growing preference for customizable loan options are stoking the demand for automotive financing in Europe. Instead of upfront payments, consumers are increasingly turning to equated monthly installments for their used vehicle purchases. Additionally, as governments push for transportation decarbonization and consumers lean toward eco-friendly transportation methods, the stage is set for a surge in European electric vehicle financing opportunities.
Key market players have bolstered their brand presence by offering competitive interest rates and forging lasting partnerships with automakers. Notably, companies like Geely are teaming up with banks, which integrates them into the vehicle financing industry and boosts their overall business profitability. The market is primed for growth, fueled by the rising prices of new vehicles, prompting consumers to seek out flexible financing options across Europe.
Europe Automotive Finance Market Trends
The Passenger Cars Market Segment to Witness Surging Growth During the Forecast Period
The European automotive industry, amid rising urbanization and a shift toward electric cars, is witnessing a notable trend of growing consumer preferences for vehicle financing. As urban centers attract more residents in pursuit of better job prospects, the demand for car financing services is rising, driven by the financial capacity of these urban migrants.
• According to the Population Reference Bureau, Europe boasted the third-highest urbanization rate worldwide in 2023, amounting to 75%. North America and Latin America witnessed the highest urbanization rates.
The surging investments in developing the region's transportation infrastructure and increasing preference for private mobility have led to consumers purchasing passenger cars. Consumers generally prefer to buy these high-end cars through flexible financing solutions rather than making a lump sum payment. Moreover, increasing prospects for passenger cars were witnessed in 2023, with various European countries reporting strong passenger car sales figures, positively impacting the demand for automotive financing services.
• According to the European Automobile Manufacturers Association (ACEA), in August 2023, the EU car market expanded by 21%, reaching 787,626 registered units, marking the 13th consecutive month of growth. Between January and August 2023, EU car registrations showcased an increase of 17.9% compared to the same period in 2022, totaling 7.1 million units.
Most OEMs in the European market have already entered strategic partnerships with minor- to medium-scale players offering financing services in order to provide suitable value-added services to customers. Furthermore, the rising adoption of costly autonomous cars and high-end electric cars across the European region will extensively contribute to the growth of the passenger car financing segment in the market.
Germany Expected to Gain Traction in the Market During the Forecast Period
The expanding e-commerce market in Germany, coupled with growing road freight, is leading commercial vehicle operators to constantly expand their truck fleets in the country to cater to the increasing demand. While purchasing trucks, these operators generally tend to avail of loan options at lower interest rates that can assist them in financing the vehicles. Therefore, with the growing commercial vehicle sales in the country, a massive demand for flexible automotive financing options will exist, thereby contributing to the segment's growth.
• According to the International Organization of Motor Vehicle Manufacturers (OICA), new commercial vehicle sales in Germany touched 359.6 thousand units in 2023 compared to 312.9 thousand units in 2022, recording a Y-o-Y growth of 15.1% between 2022 and 2023.
Furthermore, the government's extensive focus on developing and improving the country's electric vehicle charging infrastructure, coupled with advanced electric car model launches, also fosters the demand for automotive financing, owing to the high cost of electric vehicles. Major automakers in the market are either partnering with banks or setting up their financial arm operations in Germany to tap growing opportunities.
• According to the German Federal Motor Transport Authority (KBA), Volkswagen, Tesla, and Renault were the leading brands with the highest electric car sales in 2023. Volkswagen recorded sales of 181.2 thousand electric cars in Germany in 2023, followed by Tesla (111.6 thousand units) and Renault (118.8 thousand units).
The German market faces fierce competition among banking institutions, OEMs, and non-banking financing institutions. Players operating in the country compete based on various parameters such as interest rates, loan terms, flexibility in payment periods, and online loan disbursal mechanisms. During the forecast period, the German market is expected to witness surging demand for automotive financing for passenger cars and commercial vehicles, owing to growth in consumers' disposable incomes.
Europe Automotive Finance Industry Overview
The European automotive financing market, characterized by fragmentation and intense competition, sees participation from banks, original equipment manufacturers (OEMs), and non-banking financial entities. Notable contenders in this arena encompass Capital One Financial Corporation, BNP Paribas SA, Mercedes-Benz Group AG, Ford Motor Company, Societe Generale Group, HDFC Bank Limited, Standard Chartered PLC, and Banco Santander SA. These entities provide tailored auto financing solutions and strive to bolster their brand recognition by venturing into untapped markets.
• October 2023: Zeekr, a Geely-operated brand, announced its partnership with BNP Paribas and Arval to expand its European operations by offering customers financial and insurance services to purchase new vehicles. The company further stated its aim to launch its services in the three European countries of Sweden, the Netherlands, and Germany by 2024.
• October 2023: Lucid announced its strategic partnership with CA Auto Bank to launch the Lucid Financial Services arm in Europe. The arm will provide affordable leasing and financing solutions to customers willing to purchase Lucid Air Electric cars. The company is aiming to integrate itself into the German market by offering a digital platform to consumers that can assist them in the end-to-end auto loan process via the online medium.
Owing to the lucrative opportunity presented by the industry, the market is anticipated to witness the integration of various non-banking financial institutions over the coming years.
Europe Automotive Finance Market Leaders
-
Capital One Financial Corporation
-
BNP Paribas SA
-
Mercedes-Benz Group AG
-
Ford Motor Company
-
Societe Generale Group
*Disclaimer: Major Players sorted in no particular order
Europe Automotive Finance Market News
- March 2024: BMW's financial arm partnered with CRIF to introduce open banking services in the United Kingdom, targeting prospective car buyers. The collaboration aims to streamline auto financing across all UK retailers, enhancing BMW's financial arm's access to crucial creditworthiness data.
- February 2024: Banking and Payments Federation Ireland (BPFI) highlighted a significant upsurge in car loan values during Q3 2023. This surge was primarily attributed to Irish consumers' growing preference for electric vehicles. Notably, the number of car loans in Q3 2023 reached 14,994, marking a 25.5% increase over the same period in 2022. Consequently, the total value of these loans hit Euro 189 million (USD 204 million).
- January 2024: Bumper, a fintech platform specializing in flexible payment solutions for car repairs, secured USD 48 million in its Series B funding round, spearheaded by Autotech Ventures. Bumper's unique offering provides drivers with interest-free payment options, easing the financial burden of sudden repair expenses.
Europe Automotive Finance Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
-
4.1 Market Drivers
- 4.1.1 Increasing Adoption of Electric Vehicles Fosters the Growth of the Market
-
4.2 Market Restraints
- 4.2.1 Fluctuating Interest Rate Hampers the Growth of the Market
-
4.3 Industry Attractiveness - Porter's Five Forces Analysis
- 4.3.1 Threat of New Entrants
- 4.3.2 Bargaining Power of Buyers/Consumers
- 4.3.3 Bargaining Power of Suppliers
- 4.3.4 Threat of Substitute Products
- 4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION (Market Size in Value - USD)
-
5.1 By Type
- 5.1.1 New Vehicles
- 5.1.2 Used Vehicles
-
5.2 By Source Type
- 5.2.1 Original Equipment Manufacturers (OEMs)
- 5.2.2 Banks
- 5.2.3 Credit Institutions
- 5.2.4 Non-banking Financial Institutions
-
5.3 By Vehicle Type
- 5.3.1 Passenger Cars
- 5.3.2 Commercial Vehicles
-
5.4 By Country
- 5.4.1 Germany
- 5.4.2 United Kingdom
- 5.4.3 Italy
- 5.4.4 France
- 5.4.5 Spain
- 5.4.6 Netherlands
- 5.4.7 Belgium
- 5.4.8 Rest of Europe
6. COMPETITIVE LANDSCAPE
- 6.1 Vendor Market Share
-
6.2 Company Profiles*
- 6.2.1 Mitsubishi UFJ Lease & Finance Co. Ltd
- 6.2.2 HSBC Holdings PLC
- 6.2.3 HDFC Bank Limited
- 6.2.4 Capital One Financial Corporation
- 6.2.5 Wells Fargo & Co.
- 6.2.6 Toyota Financial Services (Toyota Motor Corporation)
- 6.2.7 BNP Paribas SA
- 6.2.8 Volkswagen AG
- 6.2.9 Mercedes-Benz Group AG
- 6.2.10 Standard Chartered PLC
- 6.2.11 BMW AG (Alphera Financial Services)
- 6.2.12 Ford Motor Company
- 6.2.13 Banco Santander SA
- 6.2.14 Societe Generale Group
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
- 7.1 Rising Passenger Car and Commercial Vehicle Prices to Fuel Market Demand
Europe Automotive Finance Industry Segmentation
Automotive financing, commonly referred to as car finance, encompasses a range of financial products that facilitate the purchase of vehicles, whether new or used, through methods other than a one-time, full-cash payment.
The European automotive financing market is segmented by type, source type, vehicle type, and country. By type, the market is segmented into new vehicles and used vehicles. By source type, the market is segmented into original equipment manufacturers (OEMs), banks, credit institutions, and non-banking financial institutions. By vehicle type, the market is segmented into passenger cars and commercial vehicles. By country, the market is segmented into Germany, the United Kingdom, Italy, France, Spain, Netherlands, Belgium, and the Rest of Europe.
The report offers market size and forecasts for automotive financing in value (USD) for all the above segments.
| By Type | New Vehicles |
| Used Vehicles | |
| By Source Type | Original Equipment Manufacturers (OEMs) |
| Banks | |
| Credit Institutions | |
| Non-banking Financial Institutions | |
| By Vehicle Type | Passenger Cars |
| Commercial Vehicles | |
| By Country | Germany |
| United Kingdom | |
| Italy | |
| France | |
| Spain | |
| Netherlands | |
| Belgium | |
| Rest of Europe |
Europe Automotive Finance Market Research FAQs
How big is the Europe Automotive Finance Market?
The Europe Automotive Finance Market size is expected to reach USD 31.14 billion in 2024 and grow at a CAGR of 6.73% to reach USD 43.13 billion by 2029.
What is the current Europe Automotive Finance Market size?
In 2024, the Europe Automotive Finance Market size is expected to reach USD 31.14 billion.
Who are the key players in Europe Automotive Finance Market?
Capital One Financial Corporation, BNP Paribas SA, Mercedes-Benz Group AG, Ford Motor Company and Societe Generale Group are the major companies operating in the Europe Automotive Finance Market.
What years does this Europe Automotive Finance Market cover, and what was the market size in 2023?
In 2023, the Europe Automotive Finance Market size was estimated at USD 29.04 billion. The report covers the Europe Automotive Finance Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Europe Automotive Finance Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Europe Automotive Finance Industry Report
Statistics for the 2024 Europe Automotive Finance market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Europe Automotive Finance analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
