Ireland set for car finance boom as manufacturers ramp up loans
Ireland risks becoming swept up in the global car-financing explosion as manufacturers continue to ramp up lending operations worldwide.
The Central Bank of Ireland does not compile data on the sector, making it impossible to accurately track the expansion in car credit.
However an analysis by the 'Financial Times' shows European car manufacturers, including Volkswagen, BMW, Daimler and Renault have more than doubled their lending volumes since the crash.
While the growth in credit assets reflects the banks' retreat from the sector in the wake of Lehman Brothers' collapse, the trend underscores the increasing importance of the financing arms of the large car manufacturers.
In Ireland, Volkswagen, BMW and Renault all provide loans to consumers and wholesalers. In 2015 Volkswagen Bank's Irish arm lent motorists €350m, a 53pc rise on 2014.
The company has not filed updated accounts since 2016 but sources said its lending volumes are likely to have increased in line with the expansion in sales.
The German giant, which houses the Volkswagen, Skoda, Audi and SEAT brands, holds a 24pc slice of the market.
In a sign it may be broadening its retail lending activities Mike Todd, Volkwagen Bank's CEO established a new financial services vehicle, Volkswagen Financial Services Ireland.
Based at the firm's sprawling Liffey Valley office, it was incorporated in April.
While car sales have soared on the back of the rebounding economy, Chris Hanlon, head of the car financing specialist, First Citizen Finance, stressed the market remains relatively small with close to 130,000 new cars likely to be sold this year.