India Auto Finance Market to Grow by INR 10T by 2030, Driven by EV Expansion & Financing Dema

MUMBAI, India - March 28, 2025 - PRLog -- The India auto finance market is set for unprecedented expansion, with revenues projected to rise by INR 10 trillion between 2025 and 2030, reflecting a robust CAGR of over 15%. This surge is primarily driven by increasing vehicle financing demand, particularly in the electric vehicle (EV) segment, as government incentives accelerate sustainable mobility initiatives.

EVs made up under 2% of India's 4.2M car sales in 2023, but the 30% EV goal by 2030 is driving auto loan growth. Lenders are tapping into this shift with digital and customized financing.

Digital Transformation Reshaping the Auto Loan Market in India

With a penetration rate of approximately 75%, India's auto finance market is evolving rapidly, integrating advanced digital tools to enhance underwriting, collections, and customer lifecycle management. Leading industry players, including OEM captive financiers and NBFCs, are investing in AI-driven credit assessments, fraud detection, and predictive analytics to optimize lending efficiency.

Key Developments Transforming the India Auto Loan Market

• Droom (2023): Launched 'Droom Cloud Services,' a cloud-based platform to facilitate secure and seamless auto transactions.
• Maruti Suzuki India & Indian Bank (2022): A strategic collaboration offering customized car loans across 5,700 branches, boosting vehicle financing accessibility.
• Maruti Suzuki Smart Finance (2023): Surpassed 1 million loan disbursements, reinforcing its leadership in digital car finance.
• CARS24 Financial Services (2023): Partnered with Credgenics to enhance debt collection and loan recovery using AI-driven solutions.
• Tata Motors & Bajaj Finance (2024): Signed an MoU to expand commercial vehicle financing options, further strengthening the India auto finance market.

Challenges Hindering India's Auto Finance Market Growth

• Limited Adoption of Leasing Models: Leasing and subscription models contribute only 1-2% of total automobile sales, compared to 30-40% in developed economies.
• Constraints in EV Financing: A lack of diverse financing options from banks and NBFCs hinders mass EV adoption, slowing down auto loan market expansion.

Government Initiatives Supporting Auto Finance Growth

Regional policies, such as Tamil Nadu's ₹20,000 subsidy for gig workers purchasing e-scooters, highlight government efforts to drive EV adoption and vehicle financing accessibility. Incentives and insurance schemes for gig economy workers further contribute to auto finance market expansion in India.

Future Outlook: A Digitally-Driven and Sustainable Auto Finance Ecosystem

With increasing adoption of AI, blockchain, and digital lending platforms, the Indian auto finance market is poised for sustained growth. Strategic collaborations and government-backed EV financing initiatives will continue shaping the industry's trajectory.

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India Auto Finance Market Size and Forecast (2019-2030) (https://www.makreo.com/report/india-auto-finance-market-s...)