Market Trends of Japan Auto Loan Industry
Increasing Sales Of Passenger Vehicles
Post-COVID-19, sales of passenger vehicles in Japan are observing an increase with a continuous decline in sales of commercial vehicles. SUVs, medium cars, large cars, and full-sized vans are among the segments driving the growth of passenger vehicles, with other segments still observing a small decline in sales. As the economy is gaining strength after observing a negative decline during COVID-19, sales of new vehicles are coming up with strong growth of more than 20% in comparison to last year. Among the passenger vehicle sales, Toyota, Suzuki, Daihatsu, Honda, Nissan, and Mazda are existing as automobile manufacturers leading in auto sales in the country. In addition to this, sales of three-wheelers in the region are also observing positive growth, and combined with the fuel efficiency of launched electric vehicles, sales of passenger vehicles are expected to observe positive growth over the coming years and drive its loan segment business as well.
Rising Online Banking
With an increase in business participation ranging from banks, fintech, NBFC, OEM, and other financial lenders in auto loans, there is continuously increasing competition in the market. As a result of this, loan providers are opting for digital technologies to make it affordable for users to borrow automobile loans and increase their market reach. Borrowers are finding it more comfortable to compare different auto loan offers of hybrid and online loan providers through their comfort place. Post-COVID-19, the net interest income of digital banks in Japan observed a continuous rise, leading to an increasing number of auto loan providers offering their products online. With an increasing number of lenders accepting the role of digital presence for improving their sales, banks, financial companies, and OEMs are investing in digitizing their loan process services, and this is an upcoming loan processing model for auto loans as well.
