Card Companies Eyeing Over 10 Trillion Won in Auto Installment Assets Face Intensified Competition with Capital Companies

9.9% Increase in Auto Installment Loan Assets This Year
Positive Signal for Reaching 10 Trillion Won Within the Year
Fierce Competition as Market Share Snatched from Capital Companies

[Asia Economy Reporter Ki Ha-young] As card companies aggressively enter the auto installment financing market, competition with the established capital companies is intensifying.

According to the Financial Supervisory Service's Financial Statistics Information System on the 6th, the auto installment financing assets of six card companies (Shinhan, KB Kookmin, Woori, Samsung, Lotte, Hana) operating in this sector amounted to 9.5239 trillion KRW in the first half of this year. This represents a 9.9% increase compared to the end of last year (8.6638 trillion KRW), growing by 860.1 billion KRW in six months. At this growth rate, it is expected that card companies' auto installment assets will reach 10 trillion KRW within this year.

Card companies, which are running deficits in the credit sales sector due to reduced merchant fees, are aggressively expanding their auto installment assets as part of business diversification. Shinhan Card maintained its top position with assets of 3.7439 trillion KRW, a 6.1% increase from the end of last year. Following was KB Kookmin Card, which recorded 3.5025 trillion KRW, up 1.1% during the same period. Woori Card rose 22.9% to 1.312 trillion KRW, ranking third. Samsung Card's auto installment financing assets had decreased to 521.2 billion KRW at the end of last year but turned to an upward trend this year, reaching 716.6 billion KRW in the first half, a 37.5% increase. Lotte Card increased by 30.6% to 109.7 billion KRW, and Hana Card, which started auto installment financing this year, expanded its assets to 139.2 billion KRW, surpassing Lotte Card's asset size.

On the other hand, capital companies that have dominated the auto installment financing market are seeing a decline in assets. Hyundai Capital's auto installment assets stood at 14.3945 trillion KRW in the first half of this year, down 4.0% (597.1 billion KRW) from the end of last year. KB Capital also decreased by 9.4% to 2.4573 trillion KRW during the same period. Card companies are aggressively capturing market share from capital companies. In fact, card companies' market share in new car financing has nearly doubled over the past four years. While capital companies' share has stagnated, falling to 70%, card companies have expanded their share to nearly 30%.

An industry insider said, "As profits from their core credit sales business deteriorate, card companies are strengthening auto installment financing as part of business diversification," adding, "In the future, competition among card companies and with capital companies will intensify not only in new cars but also in the used car market."

This content was produced with the assistance of AI translation services.