Indonesia Auto Finance Market Outlook to 2026

Indonesia Auto Finance Market Outlook to 2026


Market Overview:

The Indonesia Auto Finance Market has been defined as the total credit disbursement by banks/NBFCs and Captive finance companies towards the financing of used & new cars. However, in 2020 market received huge setbacks owing to the global pandemic of COVID-19 as the market witnessed a negative growth rate. The Indonesia Auto Finance market was reduced in 2020. Although, in 2021 the market recovered significantly and registered a growth rate of ~48% and reached a market size of USD 14.7 Bn.

Indonesia Auto Finance Market

Revision of down payment rates, expanding urban population, low-interest rates, and Customized loan schemes are some of the growth drivers of the Indonesia Auto Finance market. The government of Indonesia and financial regulatory authority have lowered the down payment rates (from 15-30% to 0-20%) and the interest rates to make financing a viable option for everyone who is considering purchasing an automobile.

The Indonesia Auto Finance market ecosystem is highly fragmented as the market is controlled by a few market leaders including Bankmega, Danamon, BNI, Mandiri, CIMB NIAGA, Bank Mestika, and Bank Jasa Jakarta. The Indonesia Auto Finance industry ecosystem is huge as it comprises NBFCs, Captives, Dealerships, and Online Auto-classifieds companies.

Indonesia Auto Finance Industry

Indonesia Auto Finance Market Analysis


In Indonesia, most of the main banks offer every type of loan, including trade finance, vehicle, MSE, business, and refinancing loans.

While captive NBFCs like Toyota Astra and Suzuki Finance are limited to their OEM brands, finance institutions such as BCA FSinance, Mandiri Finance, etc., offer financing to all of the major OEM brands.

The Indonesian Financial Authority (OJK) has lately permitted banks and Mult finance businesses with non-performing loans (NPLs) of less than 1% to have reduced down payment rates (between 0 and 10%).

Since SMEs accounted for almost 60% of Indonesia's GDP in 2021, credit lending businesses have reduced their interest rates to improve their clients' ability to take out loans. This move has also been aided by government initiatives to increase financial support for SMEs.

In Indonesia, a salesman and customer must frequently complete an extensive amount of documentation in order to submit an application for a car loan.

Key Trends by Market Segment:

By Ownership of Vehicle: In Indonesia, almost 57% of new automobiles have financing, compared to about 43% of used cars, even though there are more than twice as many used cars as new ones. In 2021, a total of 2.5 Mn vehicles were sold in the Indonesia auto finance market out of which 0.7 Mn are new vehicles and 1.7 Mn are used vehicles. In 2021, a total of 1.7 Mn used vehicles were sold in the industry out of which 0.3 Mn are 4W Commercial & more and ~1.4 Mn are Passenger Vehicles. Additionally, out of ~0.7 Mn new vehicles in 202, 0.1 Mn were 4W Commercial & more and ~0.6 Mn were Passenger Vehicles.

Indonesia Auto Finance Market Trends

By Type of Lenders: Banks currently issue more than half of auto finance loans, primarily due to their high credibility and lower interest rates. In 2021, Banks approved 53% of the total credit disbursed followed by non-captive NBFCs, and Captive NBFCs which rule 26% and 21% of the market respectively. Bank rates can range ~4% per annum. Some banks may offer an interest rate of ~6%, but this is usually for used cars. Loan tenure is 1 – 5 years and also have the option available for early loan repayment by paying early repayment fee.

Indonesia Auto Finance Market Revenue

By Geographical Locations: West Java and Jakarta are the leading areas in Indonesia auto finance market with a market share of 35% and a combined value of USD 5.3 Bn. Other regions such as Jawa Tengah, hold approximately 8.4% of the market share, with Jawa Timur (9.5%), Sumatera Utara (4.1%), and other regions accounting for 42.1%. All the automobile manufacturers in Indonesia (including passenger car manufacturers and commercial truck manufacturers) are a member of the non-governmental Association of Indonesia Automotive Industries​. In the passenger vehicle (PV) segment, the largest contribution is from segments with products priced at USD 16,138 and below, which were mainly the 4X2 and LCGC segments.

Indonesia Auto Finance Market Analysis

Competitive Landscape:

Major Players in Indonesia Auto Finance Market

Indonesia Auto Finance Market Growth

The Indonesian auto finance market is moderately fragmented, with the top 8 players holding more than 50% of the market share.

BCA Finance is the leading auto finance provider in Indonesia with a market share of 11.1% followed by Mandiri (8.9%), Astra Financial (7.5%), CIMB NIAGA (7.4%), Astra Finance (5.9%), and BFI Finance (4.9%).

Approximately 42% of the market is highly fragmented as it involves several small-size companies present in the country.

While captive NBFCs like Toyota Astra and Suzuki Finance are limited to their OEM brands, finance institutions such as BCA FSinance, Mandiri Finance, etc., offer financing to all of the major OEM brands.

Indonesia Auto Finance Market Demand

Future Outlook:

Indonesia Auto Finance Market Share

The Indonesia Auto Finance market witnessed substantial growth from USD 19.219 Bn in 2022 to USD 36.838 Bn in 2022. The market reported a CAGR of 2% during the forecast period of 2022-2026.

Increasing Population, growing income levels and recovery of the economy post Covid is leading to a rise in sales of vehicles which is expected to drive the rise in Auto Outstanding Loans in Indonesia

Indonesia has a large population base, 60% of whom are under 30 years old, and a steady rate of population growth averaging 0.8% annually gives the market a strong long-term potential.

Lastly, High-Mid range auto vehicle models are expected to witness strong success as the majority of automotive buyers segment includes the upper middle and high Income people leading to larger Loan amount per customer.

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1. Executive Summary
1.1 Auto Finance Market: 2017-2026
1.2 Auto Insurance and Extended Warranty Market, 2022
2. Country Overview of Indonesia
2.1 Demographic overview and major industries of Indonesia
2.2 Economic Overview of Indonesia
2.3 Trade Scenario of Indonesia
2.4 Financing overview of Indonesia
3. Market Overview
3.1 Vehicle sales by Type and Brand, 2022
3.2 New and Used Car Sales, 2022
3.3 Financing of major OEM Brands basis Total vehicle sales
3.4 Indonesia Automotive Market - Trade Scenario
3.5 Indonesia Auto Finance Ecosystem (Banks, NBFCs, Dealerships, Captives)
3.6 Indonesia Auto Finance Market Evolution
3.7 Major Types of auto loans available in the Indonesia Auto Finance Market
3.8 Indonesia Auto Finance Market Value Chain Analysis and Partnership Models
4. Industry Analysis
4.1 Growth Drivers of Indonesia Auto Finance Industry
4.2 Decision making Parameters for selecting Auto loan Vendor
4.3 SWOT Analysis of the industry
4.4 Government initiatives in the industry
4.5 Issues and challenges in the industry
4.6 Trends and Developments in the Industry
4.7 COVID-19 Impact on the Indonesia Auto Finance Industry
4.8 Customer JourneyS
5. Market Sizing and Segmentation
5.1 Indonesia Auto Finance Market Sizing, 2021
5.2 Indonesia Auto Finance Market Segmentation – Categories, 2021
5.3 Number of Auto Loans in Indonesia by Type and Geography, 2021
6. Indonesia Automotive Finance Aggregator Market
6.1 Indonesia Auto Finance Aggregator Market Overview
6.2 Impact of Aggregator Platforms on various institutions
6.3 Case study: Cermati
6.4 Case Study: Broom
7. Competition Scenario
7.1 Market Share of Major Auto Finance Players
7.2 Details of the major Auto Finance players
7.3 Strengths of Major Auto Finance Players
7.4 Recent Developments of Major Auto Finance Players
7.5 Heat Map showing Major Auto Finance Players and the various associated OEM Brands
7.6 Details of Major Auto Dealer Groups in Indonesia
8. Future Market Projections
8.1 Indonesia Auto Finance Market - Future Sizing, 2026F
8.2 Indonesia Auto Finance Market - Future Segmentation, 2026F
8.3 Emergence of EV Market in Indonesia
8.4 Digital Disruptions in the Indonesia Auto Finance Industry
9. Analyst Recommendations for Indonesia Auto Finance Market
9.1 For the benefit of customers
9.2 For the benefit of business – Technological Updates, Corporate Strategies, and Financing Collaborations
10. Indonesia Auto Insurance Market, 2022
10.1 Market Share of Major players in the Indonesia Auto Insurance Market, 2022
10.2 Cross Comparison of the Major Players in the Indonesia Auto Insurance Market, 2022
10.3 Capital adequacy ratio and solvency ratio of major players in the Indonesia Auto Insurance Market, 2022
10.4 Total Assets and Direct Premium Receivables of major players in the Indonesia Auto Insurance Market, 2022
10.5 Local People Contact Details – Insurance Market
10.6 Regulations for a foreign entrant into the auto insurance market in Indonesia
11. Indonesia Auto Extended Warranty Market, 2022
11.1 Insurers or Service Companies providing extended warranty to Automotives in Indonesia
12. Analyst Recommendations for Indonesia Auto Insurance and Extended Warranty Market
12.1 For Insurance in Indonesia
12.2 For Extended Warranty in Indonesia
Research Methodology
Disclaimer

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