Car Leasing Market: Introduction
According to the report, the global car leasing market is projected to surpass US$ 1 Trn by 2030, expanding at a CAGR of ~9% during the forecast period. Changing consumer preference toward newer mobility models, such as leasing, and changing consumer sentiments associated to car ownership are driving the car leasing market. Zero down payment and tax benefits have influenced the preference of consumers toward car leasing from traditional ownership.
Expansion of Car Leasing Market
Auto manufacturers are venturing into newer revenue pools such banking services and finance to minimize business risk and evolve with the changing landscape of the auto industry. The decline in car sales has compelled automakers to enter the “Car-as-a-Service” business models and is estimated to further boost the car leasing market. Almost all international automakers have a financial service business division and is involved in car leasing and financing options. Financial services have gained a significant share of around 10% to 20% of automakers’ revenue.
Based on lease type, the financial lease segment held a notable share of the global car leasing market. Finance leasing is a robust business model to use and attain car ownership during the end-of tenure and is extremely popular in North America with lower interest rates and zero/ minimum down payments. However, the operating lease segment is expanding at a higher growth rate due to consumer demand for flexible options and disinterest in ownership. In terms of provider, OEM/captives and NBFCs segments are anticipated to expand at a high growth rate during the forecast period. Expansion of the car leasing market and rising consumer interest in car leasing are prompting the entry of captives and NBFCs in the market.
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Regional Analysis of Car Leasing Market
In terms of region, the global car leasing market has been segregated into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America. Europe and North America, together, held a leading share of the global car leasing market in 2018, owing to higher preference for car leasing among consumers in these regions. India and China GDP have registered exponential growth during the last decade and witnessed expansion in financial sector & services. Rising consumer awareness and consumer purchase parity is projected to boost the car leasing market in these countries. India and China accounts for a prominent share globally in terms of number of vehicle sales and growth of car leasing in these countries is bound to significantly boost the global revenue.
Latin America is home to a large domestic automotive industry with car leasing being a relatively newer concept. Improved credit evaluation and increase in activity of captives are estimated to boost the car leasing market in countries across Latin America. Economies in Latin America are stabilizing due to expansion of NBFCs & captives and traditional banks, which in turn is projected to boost the car leasing market in developing regions such as Latin America.