|Lending exposure of Europe’s biggest carmakers hits €400bn|
Rise in credit assets of VW, BMW, Daimler and Renault reflects growth of finance arm
Europe’s largest car companies have more than doubled the amount of lending on their balance sheets since the financial crisis, with the growing use of auto credit in global car sales pushing their total exposure to borrowers to record highs.
Volkswagen, BMW, Daimler and Renault now have more than €400bn of global exposure to loans and leases as of the end of June, according to a Financial Times analysis of public company data — a figure comparable to the total assets of a large standalone bank such as Germany’s Commerzbank.
“You’re almost a banks analyst when you’re covering global automobiles.”
In the US, car finance companies provide about a quarter of the $1tn market for car leases and loans, according to Jefferies, though the majority of their contribution comes in the form of leases rather than loans.
The combined global credit assets of the four companies has risen by more than 10 per cent every year for the past three full years, over a period in which the rate of growth of consumer credit for car purchases has emerged as a potential concern for policymakers in the UK and the US. The overall rise is also likely to reflect entries into new geographies, and acquisitions, according to analysts, and includes dealer financing as well as lending and leases for car customers.