Indonesia’s Auto Finance Industry is expected to reach US$ 54 Bn by 2026 : Ken Research

0


Indonesia’s auto finance Industry is steered through adoption of modified vehicle ownership attributes, monetary policies, surging automotive demand, and an assured future for e-vehicles. The market is bounteous with players like Mitsubishi Lease and Finance, Suzuki Finance Indonesia, Toyota Astra Finance, Daihatsu, Honda, and many more.

Story Outline

  • Constant economic growth of Indonesia leading to higher disposable income and consumer spending.
  • Due to high inflation rate of 4% and average annual income of 9870 USD, people of Indonesia are considering buying Auto financed Used cars to satisfy their need for a personal vehicle.
  • The current Internet Penetration rate of Indonesia with 234 million current active users is helping car dealers in getting potential buyers on board.
  • EV market is ready to explode and be the future of the Automobile industry, with government support, having more than 22% of world’s nickel deposits and Indonesia’s auto Finance Industry which will make E- Vehicles an easy option for customers to consider while buying Automobile

The Indonesia’s auto finance Industry, which is growing at an estimated  CAGR of 5-7% every year, is being driven by expanding digital advancements and an increase in finance aggregators. Indonesia’s economy, which had a GDP of USD 1.19 Tn as of FY21 and a population of 277.43 million, grew at a CAGR of 4.3% from FY12 to FY22.

1. Consistent economic growth leading to high consumer spending benefitting Indonesia’s Auto Finance Industry.

Indonesia Auto Finance MarketFor more information, request a free sample Report

The statistics here show the year-to-year GDP growth of Indonesia. As compared to 2021, the GDP of Indonesia grew by 5.31% in 2022. Indonesia continuous economic growth has led to upsurge in consumer spending and higher disposable incomes. As a result, Indonesia’s Automotive Finance Industry is showing promising growth.

As the population of Indonesia is constantly growing with approx. 277.43 Mn current population, which is leading to increased demand for personal vehicle. Indonesia’s Auto Finance Industry is providing an affordable and hassle-free solution to this rise in demand for personal vehicles.

Indonesia is the 15th largest country by total area and has the 4th largest population in the world. The Industrial sector is the largest contributor to Indonesia’s GDP, between 2022-2023 the industrial sector of Indonesia contributed around 45% to its GDP.

As a result of this rapid population growth, the Indonesian automotive finance industry is expanding consistently at an estimated rate of 5-7% every year.

2. Used car market attracting more audience, providing affordable an option to consumers.

Indonesia Auto Finance MarketClick here: To know more about Indonesia’s vehicle market

The stats show the total number of vehicles sold in Indonesia from 2013-2022. Total vehicles sold in 2021 were 887,206. Out of these total vehicles sold in 2021 it is noted that 51% of these were new ones and 49% used vehicles were sold.

The inflation rate in Indonesia for 2022 was 4.3% and as of June it was calculated 4%. Also, the average annual income of Indonesia is around 9870 USD as of May 2023; these factors are the reason that people of Indonesia are considering to buy an used vehicle through auto financing to satisfy their need for a personal vehicle.

Nowadays, Automotive Financing is not only confined to only new vehicles; it also encompasses the financing of pre-owned cars, which attracts a different segment of buyers. People along with combining the benefits of auto finance options find it affordable to buy used vehicles to satisfy their need of a personal vehicle.

3. High internet penetration rate helping car dealers to find potential buyers.

Indonesia Auto Finance MarketVisit A link Request for Custom Report

The number of internet users in Indonesia was projected to grow steadily by around 37 million users (16 percent) between 2023 and 2028. The current number of active users are 234 million and in 2028 total users are estimated to be 270 million. It is worth noting that the number of Internet users has grown steadily in recent years.

An estimated 36% of car dealers report that they focus exclusively on the Internet and online advertising for their vehicles. In addition, social media is also a tool that many individuals and car dealers are exploring. About 9% of dealers use Facebook and Instagram to promote their car inventory and connect with potential buyers.

The emergence of online car classifieds portals like Carmudi, Mobil88 and OLX has simplified the used car industry in the country. The market is more transparent and buyers have a wide range of brands and models to choose from in the comfort of their own home.

4. Is it all? No. Indonesia’s is ready to explode in coming years, with government support and nickel abundance.

Indonesia Auto Finance MarketClick to read full article: Indonesia EV Market

Indonesia’s EV market is valued at approx. $533.19 million in 2022. The size of the electric vehicle market is planned to grow at a considerate level, with the help of Auto Financing option People are finding it easy to buy vehicles in their budget with easy auto financing options.

With more than 22% of the world’s nickel deposits Indonesia becomes the largest nickel producing country in the world by producing 8,00,000 tons of nickel in 2019. The largest nickel production sites are located in provinces of Central Sulawesi, Southeast Sulawesi, North Maluku, Kalimantian and Papua

Indonesia has created an ideal investment environment for electric car manufacturers. Indonesia’s electric vehicle industry has been included in the government’s latest priority investment list. Advantages such as share ownership and many tax incentives attract investors from all over the world.

Increase in demand of EV will help Indonesia Financial Industry to grow at a major level as environmental awareness is increasing day by day among people and buying an EV vehicle for an average salaried employee will be difficult which will directly make people switch to Auto Finance option.

Conclusion

Consistent economic growth, high internet penetration rate, growth of used vehicle consumer, and EV Market; is helping the Indonesia Auto Finance Industry to bloom and the industry is helping consumers to satisfy their personal vehicle need with affordable options. With a growing estimated CAGR of 5-7% every year; Indonesia auto finance market still needs to take care of constant rise in GDP and growth of EV market in coming years.

For more insights on market intelligence, refer to the link below: –

Indonesia Auto Finance Market

Share.