South Korea Auto Loan Market Market Size (2024 - 2029)

The South Korea auto loan market is experiencing significant growth, driven by the recovery in vehicle sales post-COVID-19 and the increasing dominance of passenger vehicles. The market's expansion is further supported by the shift towards digital banking, which has facilitated a rise in online loan applications, enhancing accessibility for vehicle buyers. This trend is expected to continue, contributing to the overall increase in the market's scale and scope over the forecast period.

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Market Size of South Korea Auto Loan Industry

South Korea Auto Loan Market Summary
Study Period 2020-2029
Base Year For Estimation 2023
Market Size (2024) USD 34.17 Billion
Market Size (2029) USD 55.61 Billion
CAGR (2024 - 2029) 10.23 %
Market Concentration Medium

Major Players

South Korea Auto Loan Market Major Players

*Disclaimer: Major Players sorted in no particular order

South Korea Auto Loan Market Analysis

The South Korea Auto Loan Market size is estimated at USD 34.17 billion in 2024, and is expected to reach USD 55.61 billion by 2029, growing at a CAGR of 10.23% during the forecast period (2024-2029).

Sales of vehicles in South Korea observed a small decline with the advent of COVID-19. They recovered in sales after the pandemic and created new opportunities for Auto Loan providers in the country. Among the passenger vehicles in the country, cars are occupying a significant share resulting in an increased promotion of these vehicles with the launch of various loan products varying with rate of interest and loan period in the market. In terms of total vehicles manufactured in the country, commercial vehicles exist with a small share of around 9%, making passenger vehicles dominate the market in South Korea.

Post-COVID-19, with a changing business model for a large number of sectors, banking, and financing have even gone through major changes. With the adoption of digital banking, there is an increase in the amount of loans being generated through online channels increasing the number of vehicle buyers applying for loans through online mode. The rising use of online banking, with a penetration rate of around 80%, is expected to further drive the digital auto loan market in South Korea.

South Korea Auto Loan Industry Segmentation

An auto loan is a segment of the loan category offered by banks and financial service providers to automobile buyers over a given period with an agreed interest rate and installment amount. Mostly, the loan is taken for two segments of automobiles, which consist of passenger and commercial vehicles.

The study gives a brief description of the South Korean auto loan market and includes details on interest rates, type of loans offered, and auto loan products & services. South Korean auto loan market is segmented by product, provider type, and tenure. By product, the market is segmented into passenger vehicles and commercial vehicles. By ownership, the market is segmented by new vehicles and used vehicles. By provider type, the market is segmented by banks, NBFCs (non-bank financial companies), credit unions, and other provider types (fintech companies). By tenure, the market is segmented into less than three years, 3 to 5 years, and more than 5 years. 

The report offers market size and forecasts for the South Korean auto loan market in value (USD) for all the above segments.

By Vehicle Type
Passenger Vehicle
Commercial Vehicle
By Ownership
New Vehicles
Used Vehicles
By Provider Type
Banks
NBFCs (Non Banking Financials Companies)
Credit Unions
Other Provider Types (Fintech Companies)
By Tenure
Less than Three Years
3-5 Years
More Than 5 Years
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South Korea Auto Loan Market Size Summary

The South Korea auto loan market is poised for significant growth, driven by the recovery in vehicle sales post-COVID-19 and the increasing adoption of digital banking. The market is characterized by a dominant presence of passenger vehicles, with cars holding a substantial share. The shift towards online banking has facilitated a rise in auto loans, as more consumers opt for digital channels to finance their vehicle purchases. This trend is further supported by the stable price levels of passenger vehicles and the rising sales of electric vehicles, which are reshaping the loan products offered by providers. The market is also witnessing a shift in loan shares among different vehicle segments, influenced by changing consumer preferences and global interest rate trends.

The fragmented nature of the South Korean auto loan market is marked by the presence of numerous players, including Hyundai Capital, Mercedes Benz Group, Hana Capital, Woori Bank, and Bank of America. Technological innovations in banking and financial services are enhancing the customer experience, with consumers increasingly using smart devices to apply for loans. The competitive landscape is heavily influenced by the quality of customer service and support offered by lenders. Initiatives such as Kia's partnership with Hyundai Capital Services and the launch of Woo Financial Group's financing app highlight the industry's focus on making auto loans more accessible and affordable, particularly for electric vehicles. These developments are contributing to the market's expansion and the evolving dynamics of vehicle financing in South Korea.

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South Korea Auto Loan Market Market Size - Table of Contents

  1. 1. MARKET DYNAMICS AND INSIGHTS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Leading Share of Passenger Vehicles in Car Sales

      2. 1.2.2 Quick Processing of Loan through Digital Banking

    3. 1.3 Market Restraints

      1. 1.3.1 Rising Interest Rates Affecting New Auto Buyers Demand for Loan

    4. 1.4 Market Opportunities

      1. 1.4.1 Emerging Market of Electric Vehicles Expanding the Auto Loan Market

    5. 1.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.5.1 Bargaining Power of Suppliers

      2. 1.5.2 Bargaining Power of Buyers

      3. 1.5.3 Threat of New Entrants

      4. 1.5.4 Threat of Substitutes

      5. 1.5.5 Intensity of Competitive Rivalry

    6. 1.6 Insights on Consumer Behavior Analysis

    7. 1.7 Insight on Various Government Regulations in the Market

    8. 1.8 Insights on Technological Innovations in South Korea Auto Loan Market

    9. 1.9 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Vehicle Type

      1. 2.1.1 Passenger Vehicle

      2. 2.1.2 Commercial Vehicle

    2. 2.2 By Ownership

      1. 2.2.1 New Vehicles

      2. 2.2.2 Used Vehicles

    3. 2.3 By Provider Type

      1. 2.3.1 Banks

      2. 2.3.2 NBFCs (Non Banking Financials Companies)

      3. 2.3.3 Credit Unions

      4. 2.3.4 Other Provider Types (Fintech Companies)

    4. 2.4 By Tenure

      1. 2.4.1 Less than Three Years

      2. 2.4.2 3-5 Years

      3. 2.4.3 More Than 5 Years

South Korea Auto Loan Market Market Size FAQs

The South Korea Auto Loan Market size is expected to reach USD 34.17 billion in 2024 and grow at a CAGR of 10.23% to reach USD 55.61 billion by 2029.

In 2024, the South Korea Auto Loan Market size is expected to reach USD 34.17 billion.

South Korea Auto Loan Market Report Snapshots

South Korea Auto Loan Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)