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The Brazil Car Finance Industry Has Grown Steadily In the Last Five Years Owing To The Surging Prices Of Cars Due To Inflation In Commodity Prices: Ken Research

February 9, 2023

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The Car Finance Market in Brazil saw a huge dip in 2020 due to the pandemic. However, the market is expected to gain traction in the upcoming years.

Brazil Car Finance Market Overview: The Brazil Car Finance Market is currently at the growth stage due to increased demand for luxury cars as well as the surging car prices. The Car Finance Market in Brazil is a consolidated market with some top players. Production and demand for cars has increased in Brazil as it is the world’s largest market for automotive. E-Mobility and alternative drive technologies are creating a new business segment for the Car Finance Industry in the nation.

Surging Prices of Cars Fuels the Market Growth: The global inflation of commodity costs has prompted car manufacturers to raise car pricing over the past few years. In Brazil, it makes sense to borrow money to pay for an automobile because the price is frequently too high to cover one’s own income or assets as the nation is a developing nation. Most car buyers must seek out a car loan in order to purchase their preferred cars since very few car buyers truly have the money saved. Brazilians choose to take out loans since the average price of a new car is quite high.

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Impact of Covid-19 on the Brazil Car Finance Market: Brazil saw a significant drop in yearly car production in 2020. Furthermore, sales were down during the same period. Lockdowns and other preventative measures imposed by the government have had a significant impact on the Car Finance Industry in Brazil. However, the market has rebounded significantly following the relaxing government sanctions and the reopening of production houses in the second quarter of 2021. The market has re-entered a growth phase and appears promising for the projection term.

Rise in Demand for Hatchbacks: The primary driver behind the growth of Car Finance Market in Brazil is an increase in consumer demand for hatchbacks in the country. Compared to previous year, the overall penetration rate of car finance in Brazil has expanded significantly due to the rise in automobile consumption, modifications in residents’ consumption notions, and improvement in the consumer finance sector.

Analysts at Ken Research in their latest publication “Brazil Car Finance Market Outlook to 2027F – By Vehicle Type (New Car, Used Car), By Type of Car (Hatchbacks, Sedans, Luxury Cars, Sports Utility Vehicle), By Provider (Banks, NBFCs, OEMs and Others)” observed that Brazil Car Finance Market has shown considerable growth in the last five years. In the upcoming years, it is predicted to expand more rapidly due to emergence of online car finance applications, rising demand for electric vehicles, the adoption of digital technologies for car financing and increasing vehicle prices. The Car Finance Market in Brazil is expected to grow at ~% CAGR over the forecasted period 2022P-2027F.

Key Segments Covered in the report