Market Trends of South Korea Auto Loan Industry
Leading Share of Passenger Vehicles
Retail sales of passenger vehicles in South Korea have observed a continuous rise in market value over the years, combined with a stabilized price level for all the segments of passenger vehicles. This led to an increase in the number of passenger vehicle units being sold in the country with a rise in the amount of automobile loans generated. Post-COVID-19, with a rise in interest rates globally for curbing inflation, interest rates on auto loans also observed a significant rise, resulting in a positive trend for interest revenue of auto loan providers. Over the period, sales of electric vehicles in passenger vehicles had observed a rise in South Korea, with declining sales of petrol and diesel vehicles leading to loan providers making changes in their products as per the sales. Medium vehicles and pickup trucks exist among the passenger vehicle segments, observing a rise in unit sales, with major share-holding segments of SUVs and small vehicles observing a decline in sales, making changes in loan shares of different segments.
Rising Electric Vehicle Market
The rising market of electric vehicles in South Korea is providing auto loan manufacturers with a new segment of business in the country. As the cost of manufacturing electric vehicles is comparatively high for making them affordable, governments are providing subsidies on the loans being offered resulting in a rising number of people buying electric vehicles with increasing business for loan providers. Sales of electric vehicles in the country are rising at a y-o-y growth rate of around e leading to loan providers increasing loans on Electric vehicles with a rise in their ESG scores and green financing efforts of the industry. Hyundai, Kia, Genesis, Samsung Motors, and GM Korea are among some of the electric vehicle manufacturers in South Korea, providing their subsidized loan products to buyers and leading the market in a new direction.
