What is the Size of Mexico Car Finance INDUSTRY?
Mexico Car Finance Market is growing at a CAGR of ~% in 2017-2022 and is expected to reach ~USD Bn by 2027F.
The Car Finance Market is largely driven by growing middle-class population, rising vehicle sales, urbanization, accessible financing options, and partnerships with automakers.
The growing demand for auto financing in Mexico can be observed through increased vehicle sales. For example, according to the Mexican Automotive Industry Association (AMIA), new vehicle sales in Mexico surged by 22.2% in the first half of 2021 compared to the same period in the previous year.
Auto finance companies in Mexico offer diverse financing options to cater to different customer needs.
To learn more about this report Download a Free Sample Report
instance, they provide traditional car loans with varying interest rates and terms, as well as leasing options that allow customers to use a vehicle for a specific period without full ownership.
The expanding middle-class population in Mexico is driving the demand for car financing. As more individuals enter the middle-income bracket, their purchasing power and desire for vehicle ownership rise.
The adoption of digital platforms and technological advancements have transformed the car finance industry. Online loan applications, digital documentation, and automated processes have improved the efficiency and convenience of obtaining car financing which has fueled the growth in the market.
MEXICO CAR FINANCE MARKET BY TYPE:
The Mexico Car Finance market is segmented By Type into New Car and Used Car.
Used car segments dominates the car finance market in Mexico in 2022.
Due to the country’s economic conditions, affordability considerations, and the availability of a diverse range of used vehicles in the market. The used car segment often attracts a larger customer base due to lower purchase prices and potentially more flexible financing options, making it a popular choice among consumers looking for cost-effective transportation solutions.
Visit this Link: – Request for custom report
MEXICO CAR FINANCE MARKET BY TYPE OF CAR
The Mexico Car Finance Market is segmented By Type of Car Hatchback, Sedan, SUV, Multipurpose and others.
Sedan cars dominates the market in 2022, followed by SUVs.
Sedans have traditionally been popular in the Mexican market due to their versatility, affordability, and fuel efficiency. Sedans cater to a wide range of customers, including individuals, families, and professionals, making them a versatile choice for various purposes. Additionally, sedans often offer competitive pricing compared to SUVs and multipurpose vehicles, making them more accessible for customers seeking auto financing.
MEXICO CAR FINANCE MARKET BY TYPE OF INSTITUION
The Mexico Car Finance market is segmented by type of institution into Bank, NBFC and Captives.
Banks Dominates the Mexico car finance market in 2022.
Banks have a strong presence in the financial sector and often have well-established lending capabilities and extensive customer bases. They are typically associated with offering a wide range of financial services, including auto financing, and have the resources to provide competitive interest rates and flexible loan terms. Banks brand reputation, trustworthiness, and extensive branch networks position them as preferred choices for many customers seeking auto financing.
MEXICO CAR FINANCE MARKET BY TENURE
The Mexico Car Finance market is segmented by Tenure into 3-4 years & 4-5 years.
3-4 years loan tenure is more preferred by the customers in Mexico in 2022.
3-4-year tenure is commonly preferred by customers due to several reasons. Firstly, it aligns with typical ownership periods for many individuals who prefer to upgrade their vehicles within a few years. Secondly, a shorter tenure generally results in lower interest costs and faster loan repayment. This appeals to customers seeking to minimize overall interest expenses and have the flexibility to change vehicles more frequently.
MEXICO CAR FINANCE MARKET BY PRICE
The Mexico Car Finance market is segmented by Price into High (500,000+), Medium (200k-500k) and Low (below 200K).
Medium (200k-500k) is the dominant segment in the market in 2022.
Firstly, it covers a wide range of vehicles that cater to various customer preferences and needs. Secondly, the medium price segment represents a balance between affordability and features, making it appealing to a significant portion of the market. Lastly, financing options are typically more accessible for medium-priced vehicles, attracting a larger customer base.
Request free 30 minutes analyst call
MEXICO CAR FINANCE MARKET BY MODE OF BOOKING
The Mexico Car Finance market is segmented by Mode of Booking into Online and Offline.
Online segment dominates the Mexico car finance market in 2022.
The growth of e-commerce and digital platforms has significantly influenced consumer behavior, including the way they research and purchase vehicles. Online booking offers convenience, accessibility, and the ability to compare financing options and terms from various providers. Additionally, the COVID-19 pandemic has accelerated the adoption of online channels for car finance transactions
COMPETITION SCENARIO IN MEXICO CAR FINANCE MARKET
The Mexico auto finance market is highly competitive, with several players vying for market share. These companies offer a range of financing options to cater to different customer segments. The market is characterized by competitive interest rates, flexible loan terms, and diverse promotional campaigns.
Digitalization has become increasingly important, with many finance companies offering online platforms and mobile applications for convenient loan applications and account management. Transparency and customer service have become focal points, with companies striving to provide clear fee structures and efficient support. Overall, the current market scenario reflects a competitive landscape where finance companies continuously innovate to attract and retain customers
WHAT IS THE EXPECTED FUTURE OUTLOOK FOR THE OVERALL MEXICO CAR FINANCE MARKET?
The Mexico Car Finance market was valued at USD ~billion in 2022 and is anticipated to reach USD ~billion by the end of 2027F, witnessing a CAGR of ~% during the forecast period 2022-2027F. The realistic growth scenario represents the most likely scenario as per current market conditions. This scenario assumes that there will be no overall impact on the market due to any potential COVID-19 waves in the future.
The Mexico Car Finance market is driven by growing middle-class population, rising vehicle sales, urbanization, accessible financing options, and partnerships with automakers. However, the market is also constantly being influenced by rapid development in technology, product innovation, and diversification in some countries.
For instance, in February 2023 BYD, the world’s leading manufacturer of new energy vehicles, recently formed a strategic partnership with Santander Bank (Santander) in Mexico, a multinational banking group for Auto financial solutions in Mexico. This partnership seeks to facilitate access to all new energy BYD vehicles to customers and non-customers of the Bank with an offer of a 10% down payment and financing of up to 72 months, in addition to plans with 0% commission for opening.
Mexico’s projected economic growth and rising middle-class population indicate a positive outlook for the car finance market. As the economy strengthens, more individuals are likely to enter the middle-income bracket, leading to increased purchasing power and a higher demand for auto financing. For example, according to the International Monetary Fund (IMF), Mexico’s GDP is forecasted to grow by 4.3% in 2023.
Advancement in Technology like providing personalized and convenient customer experiences. This includes offering customized financing solutions, faster loan approvals, and superior after-sales services. For instance, Banco Santander México has implemented digital tools and simplified processes to enhance the customer experience and reduce loan approval times which will further fuel the market growth.
As the global automotive industry transitions towards electric mobility, Mexico is expected to follow suit. The government’s commitment to sustainable transportation and the growing availability of EV models in the market will drive the demand for EVs. This, in turn, will present opportunities for innovative financing options specific to EVs, such as subsidized interest rates or extended repayment periods.
For More Insights On Market Intelligence, Refer To The Link Below: –
Mexico Car Finance Market Outlook 2027F
Related Reports By Ken Research:-
Thailand Auto Finance Market Outlook to 2026F
UAE Auto Finance Market Outlook to 2026F
Egypt Auto Finance Market Outlook to 2027
Ken Research is a Market Research and Consulting Firm, based out of India, Indonesia and UAE. Since 2011, we have been assisting clients globally with our Syndicate and Bespoke Market Research and Advisory Services.
This release was published on openPR.