Philippines Auto Finance Market Surges with 7.31% CAGR and Record Vehicle Sales in 2023

METRO MANILA, Philippines - Aug. 6, 2024 - PRLog -- The Philippines Auto Finance Market has demonstrated impressive growth, achieving a compound annual growth rate (CAGR) of 7.31% from 2019 to 2023. Despite facing high inflation and interest rates in 2023, the market saw a historic surge in motor vehicle sales, reaching approximately 430,000 units. This remarkable performance highlights a strong recovery and expansion phase for the industry, driven by robust consumer spending on both passenger and commercial vehicles post-pandemic.

Noteworthy Growth and Economic Resilience
In 2023, the Philippines Auto Finance Market saw a 22.9% increase in motor vehicle sales, driven by a 5.6% GDP growth and higher vehicle demand. This positive trend stands out against the negative performance in other ASEAN countries like Indonesia, highlighting the Philippines' economic resilience and consumer confidence. This robust market performance positions the Philippines for continued expansion as a leader in the regional auto finance sector.

Market Structure and Key Drivers
The Philippine auto finance market is mainly driven by Universal and Commercial Banks (UKBs), which hold over 80% of the industry's assets. The top 10 UKBs, including two state-owned institutions, are key players in auto financing. Additionally, the used car segment is growing due to economic uncertainties and pandemic recovery, with consumers seeking affordable used vehicles, thus creating new opportunities for auto financing.

Impact of Government Policies and Technological Innovations
Government support for green vehicles and fintech advancements are fueling growth in the Philippines Auto Finance Market. The TRAIN law initially boosted vehicle purchases, though increased excise taxes and fuel costs briefly slowed growth. However, favorable financing terms and recovery efforts sustain strong demand for auto loans. Technological investments in digital platforms and automation, along with regulatory reforms to improve financial inclusion and attract foreign investment, are shaping the market's future.

Recent Developments

• As of March 1, 2024, Toyota Financial Services Philippines (TFSPH) ceased accepting post-dated checks from select branches.
• In 2023, TFSPH reported a 72.9% increase in net income to PHP 1,792 Million.

Challenges and Future Outlook
The Philippine auto finance market is poised for substantial growth, bolstered by digital finance expansion, supportive government policies, and increasing vehicle sales projected to reach 1 million units by 2025. With a growing population, rising income levels, and continued technological advancements, the market is well-positioned for sustained success and expansion.

For more detailed information:
Philippines Auto Finance Market Size and Forecast (2019-2029) (https://www.makreo.com/report/philippines-auto-finance-ma...)

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