Car finance market set to expand exponentially

Mon, 08 May 2006



In both Western and Eastern Europe, the automotive finance industry is set to expand exponentially due to global high growth rates and low interest rates .

A new report from analysts Frost &Sullivan has highlighted that finance companies in Europe, China and North America have to focus on counteracting heavy consumer scepticism with regards to financial services . Factors such as VAT issues on finance and insurance products, price increases and fluctuations in interest rates have unsettled consumer trust, states the report. In response, companies need to focus on educational advertising designed to regain consumer trust.

In China, finance companies aim to enhance awareness among car buyers about car-financing options as opposed to cash. The finance value of the Chinese market is forecast to reach US$4,900 million by 2011. In comparison, Western European point-of-sale finance markets are expected to be worth €111 billion by 2010. Finance products and car sales have been boosted in the European market via promotions, value-added services and improving affordability, despite increases in car prices .
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