Industry Trend Analysis - Auto Loans Resurgence Sign Of Consumer Bullishness - MAY 2017


BMI View: A return to growth in auto lending in Poland highlights a key inflection point in consumer confidence given past consumer preferences of avoiding debt - financed car purchases. It illustrates that the market is now effectively firing on all cylinders, which has prompted us to revise up our passenger car sales growth forecast to 6.1% in 2017.

In response to signs of growing Polish consumer confidence translating more strongly into spending on big ticket items we have revised up our forecast for passenger car sales growth in 2017 to 6.1%, up from 3.0% previously. We now expect sales volumes to reach 441,507 units as consumers raise their spending on new vehicles, particularly through auto loans.

Recent data highlighting that Polish consumers are considering purchasing new vehicles through auto loans is a strong sign of growing consumer bullishness. We previously highlighted that Polish consumers have traditionally steered clear of auto loans given the weaker credit ratings of households and the difficulties associated with getting a loan ( see ' Fall In Auto Loans Masks Promising Surge In Demand ' , May 31 2016). However, recent data has shown that in April 2016 the value of outstanding auto loans began to grow after more than six years of year-on-year (y-o-y) declines, with growth having accelerated to 6.2% by December 2016 ( see chart above). We believe this is a sign of consumers reaching a clear inflection point in terms of their renewed willingness to borrow to fund purchases.

Bullish Signs As Auto Loans Growth Back In Black
Poland - Total Auto Loans Outstanding, PLN bn & % chg y-o-y
Source: KNF, BMI

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