Examine The MFBI UK Retail Car Finance Market

This report on the retail car finance market, published in August 2004, is a comprehensive analysis of current trends in the retail market for car finance supplied by car dealers and by direct lenders between 1999-2004, with forecasts to 2009.

The report concentrates on the retail finance market and therefore excludes the wholesale finance market and the financing of company and business fleets. The report analyses all aspects of the retail car finance market including market size and trends and the structure of car finance supply in Britain. In addition to analysing the main elements of the market, the report also provides a comprehensive analysis of the factors that influence market demand. These include developments in the UK economy, demographic and car ownership trends, consumer credit and finance trends, new and used car sales and legislation.

Executive Summary

Market Background 1999-2004

The UK economy; demographic trends and car ownership; UK demand for cars; size and structure of the car parc, scrappage rates and car parc size.

The Retail Car Finance Market 1999-2004

Market size and trends by value and volume; new and used car finance; POS and direct (loans) car finance; POS product segmentation - new and used cars; market trends - voluntary terminations, sub-prime finance; product trends - HP, PCPs, POS loans, personal leasing, personal loans, mortgage lending.

Factors Influencing the Market

Vehicle taxation; Block Exemption Regulation; car replacement cycles; outright purchase and pay-for-use; used car residual values; interest rates and finance; rising demand for credit; rising house prices; County Court judgements; finance legislation; Basel capital accord; EU money laundering directive; FSA regulations.

The Finance Supply Structure 1999-2004

Vehicle manufacturer captive finance companies - Ford Credit, GMAC, Volkswagen Financial Services; Independent finance companies - Black Horse, Capital Bank, GE Capital, Cattles, Paragon Car Finance, Singer & Friedlander, Close Motor Finance, Carlyle Finance; Direct lenders - high street banks, building societies, Internet banks, other direct lenders.

Car Finance Distribution

Number of distribution outlets 1999 and 2004 - bank branches, car dealers, financial advisers, building societies, credit and finance companies, finance brokers; franchised car dealers, largest dealer groups 2004; independent car dealers, largest independent car dealers 2003; channel usage for car loans; Internet distribution.

The Finance Consumer

Trends in car finance; main methods of financing car purchase - savings, car dealer finance, personal loans, employer cash allowance, credit card cheques, house mortgage; source of finance by main car driven; demographic analysis of main finance methods; finance methods used by vehicle make and length of ownership; demographics of personal loan users; vehicle purchase price and finance used.

The Future and Conclusions 2004-2009

The UK economy, interest rates, house prices, external shocks, consumer disposable incomes, slowdown in consumer spending; The car finance market, forecasts by volume and value 2004-2009, market and product trends, market and product opportunities; The supply structure, independent finance companies, direct lenders; Distribution, distribution and block exemption; The motor finance consumer

Gulf Finance House announces plans to create regional steel giant

Gulf Finance House, the leading Islamic investment bank with a track record for innovation today announces plans to create HadeedMENA, a new steel producing company. Conceived by Gulf Finance House, HadeedMENA aims to plug the shortfall in domestic steel production in Middle East and North Africa. In a deal with an estimated end value of US$5 billion, GFH is partnering with strategic partners Emirates International Investment Company, Khaleej Development Company (KDC), Q-Invest, and First Energy Bank, and leading technical partners and market advisors MN Dastur and Gulf Organization for Industrial Consulting; all of whom have a strong reputation regionally and internationally. The project will deliver a capacity of 8 million tonnes of steel per annum in the next four years, and target to reach 12 million tonnes in the future, serving 15% of total regional needs and become one of the key steel producers in the MENA region.
It is estimated that the Middle East alone accounts for more than USD$ 2 trillion of investments in the construction and real estate sector as a result of the surplus created through high oil prices. Meanwhile, the MENA region consumes approximately 35.4 million tonnes (2006) of steel end products, although the region produces only around 24 Million Tonnes.
HadeedMENA will operate in a number of locations across Asia and Africa, serving both upstream and downstream requirements in the marketplace. Upstream production will be located in countries rich in iron ore and coal, while downstream activity will focus on countries with exceptionally high demand across the GCC and MENA region.

Gulf Finance House Chairman Esam Janahi commented: “We intend to differentiate ourselves by taking a ‘top to bottom’ approach to the value chain. It will focus both on upstream productions for steel billets as well as the downstream manufacturing for steel re-bars and structures. The company is currently in the final negotiation stages for a number of partnerships and acquisitions that we will be able to announce in the near future ”

“GCC economies realize that establishing new manufacturing and service capacity will allow them to be far more responsive to their long-term domestic needs. The creation of HadeedMENA is a perfect example of this approach. Instead of being dependent on steel imports, we will now be able to produce this essential product within our own borders.” Said Dr. Ahmed Mutawa from GOIC.

“We are pleased to join Gulf Finance House in this partnership as it forms one of the main industrial development initiatives in the region. We believe our plans for this company will give us the competitive advantages required to become a serious regional player’, said Ahmed Al Qattan, Vice Chairman and Managing Director of Khaleej Development Company (KDC).

Commenting on the technical plans of the company, Supriya Das Gupta, the Chairman of MN Dastur said, “The plants will adopt the latest technology and manufacturing techniques by partnering with leaders in steel manufacturing; employing the most up-to-date technology and processes.”

“Beyond the immediate economic benefits, this kind of initiative has a wide-ranging impact on employment levels and standards of life. Steel production generates a strong pipeline of follow on jobs in engineering, manufacturing, design and support sectors – all of which provide jobs and improved standards of living” said Professor Abdulatif Al Meer, Managing Director of Q-Invest in Qatar.