Vehicle loans for families registered an annual increase of 0.6% in May 2022, reported the AAP

The Automotive Association of Peru (AAP) reported that at the end of May 2022, the balance of the vehicle loan portfolio granted by companies in the financial system to Peruvian families registered S/ 3,440 million, an amount higher by 0.6% compared to May 2021.

For the automotive industry, this positive performance is explained by the recovery of employment and income in the country after the confinement measures that were dictated in the country caused the collapse of consumer confidence, with a precarious labor market, high inflation and the lack of government support would begin to limit consumption in the following months, with the consequent weakening of financing.

When reviewing the information by type of financial entity, the AAP indicated that, as of May 2022, banking companies account for 52.2% of the vehicle loan portfolio, followed by credit companies with 24.1%, financial companies with 23.1%, and the Municipal Banks and Rural Banks with 0.6%.

“It stands out that these percentages of participation in this segment of the credit market have changed significantly in recent years. Thus, when considering figures from 2015, 85% was concentrated in banks, while financial companies only had 8.3% and credit companies 5.5%”, added the AAP.

The foregoing, affirms the AAP, denotes the entry of new players to this market, which has great growth potential if one takes into account that of the total new light vehicles that are marketed in the country, only 35%, approximately, are they acquire with financing, when in other countries that figure is much higher, for example, Chile with more than 80% and Mexico above 60%.

Finally, a point worth noting for the AAP, “is the relevant reduction in the levels of dollarization of the vehicle loan portfolio in recent years, going from more than 40% in May 2016 to 10.4% in May 2022, the lowest percentage since records have been recorded, and that translates into less exposure of Peruvian families to the risk of an increase in the exchange rate. This has been possible due to the adequate measures taken by the SBS and the BCRP, and the greater financial education of part of the population”concluded the automotive union.

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