|Last Quarterly Update:||12/12/2016|
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Companies in this industry lend money to customers to finance automobile, equipment, or other machinery and vehicle purchases and leases. Major companies include Caterpillar Financial Services, CIT Group, General Electric Capital, and Santander Consumer USA (all based in the US) as well as DVB Bank (Germany) and Toyota Financial Services (Japan). Units of major banks and auto makers typically provide sales financing.
Globalization and greater access to the Internet are spurring companies to pursue growth internationally. Though the US and Europe are the two largest markets for auto financing and leasing, demand is growing in emerging markets. Many large companies already have international operations and continue to expand. Demand for loans and credit, as well as the rules and regulations governing lending practices, varies from country to country.
The US auto and equipment lending industry includes about 4,300 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $90 billion.
Demand is driven by interest rates, consumer confidence, and capital spending by businesses. The profitability of individual companies depends on their ability to originate, service, and collect loans and leases, as well as to collect fees and interest on financing products. Large companies have economies of scale in securing access to capital. Small companies can compete effectively by specializing. The US industry is highly concentrated: the top 50 companies account for more than 85% of revenue.
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