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Economic pressure means “single digit growth” in the automotive finance sector in 2022

According to FLA, pressure on household income and constraints on continued new car supply mean that the UK automotive finance sector is likely to be restricted to “single-digit growth” in 2022.

According to data from the Financial Leasing Association’s March automotive finance sector, 2021 trading volumes, hampered by ongoing COVID-19 trading restrictions in the sector, increased by just 2% to £ 4.75 billion. .. This is because the value of the new business has increased by 8%. 238,667 units.

This marks a slowdown in recovery at the end of the first quarter of 2022, with overall value up 28% to £ 10.65 billion, up 17% to 570,081 new transactions in the same quarter of 2021. Brought the amount.

FLA Principal Investigator and Chief Economist Geraldine Kirkelly sought to highlight the impact of supply constraints on the recovery of cars, but also warned of the impact of the UK’s cost of living crisis.

She states: “The slowdown in growth reported in the consumer car finance market in March was primarily due to the negative impact of supply shortages in the new car market. The consumer used car finance market is the first new monthly business. With over £ 2 billion, it reached new heights in March and remained strong.

“The UK’s economic outlook has weakened significantly due to the squeeze on household income and corporate profits due to rising inflation.

“This year’s pressure on household income and ongoing car supply issues mean that the consumer car finance market is likely to record single-digit growth in new business value as a whole in 2022. . “

“As always, customers who are worried about paying their payments should consult their lenders as soon as possible to find a solution,” Kilkelly added.

According to FLA data, the consumer new car financial market reported a 6% (£ 4.64 billion) and 8% (188,335) decrease in the new car business in March compared to the same month in 2021. ..

Overall, in the first quarter of 2022, new trading volume in this market increased 6% from 748,339 in the same quarter of 2021, and the value of the business increased 9% to £ 17,890 million. This is probably because OEMs are focusing on higher priced vehicles and EVs. ..

Bridging the March gap, the consumer used car financial markets reported new businesses up 31% in value to £ 2.2 billion and 10% in quantity to 136,315 compared to the same month in 2021. bottom.

Overall in the first quarter of 2022, new trading volume in this market was 381,746, up 26% from the same quarter in 2021. This is because the value increased by 21% to £ 1.44 billion.

Economic pressure means “single digit growth” in the automotive finance sector in 2022

Source link Economic pressure means “single digit growth” in the automotive finance sector in 2022

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