Automotive News

One day in July, the reporter walked into one of Guangzhou Honda Automobile 4S shops in Beijing. Just beside the front entrance, a sample car - Guangzhou Honda City - was placed there and on it laid a billboard for advocating the method of buying car with a loan. "This car is worth nearly RMB110, 000 yuan, but now you just need to pay 30 percent of the total cost as a down payment plus relevant taxes, amounting to some RMB46, 000 yuan all together, the car will be yours. If you choose 18-term installment, you just have to pay some RMB4, 000 yuan each month without any interests or commission charges", the salesman calculated for the reporter with his calculator as he noticed the latter might be interested in the car. "It would be a good decision to buy this car with a loan now and we delivered over 20 orders of this kind of cars last month!" he then added. After that, the reporter visited several 4S shops, including FAW-Toyota, Shanghai Volkswagen and Guangzhou Toyota. All of them were having sales promotion for buying cars with a loan. It's clear that in July, a traditional off-season for car market, every dealer has treated car loans as an important part in sales promotion.

The automobile industry has maintained a high speed of growth from 2000 to 2009. However, only 8 percent of consumers choose to buy their cars by loan. The car loan market definitely has an attractive prospect of development.

In China's automobile consumption credit market, traditional bank is undoubtedly one of the important participants. "From 2000 to 2009, the automobile industry has maintained a high speed of growth. However, only 8 percent of consumers choose to buy their cars by loan. The car loan market definitely has an attractive prospect of development." said Xu Xiaohua, General Manager of CITIC Bank Headquarters' Auto Finance Center. Accelerating the development of potential car consumption credit market will directly benefit the bank.

In addition to banks, auto financing company is another important participant of automobile consumption credit market. The year 2009 witnessed the founding of Chery- HuiShang Bank Auto Financing Co., Ltd, invested by Chery Corporation and HuiShang Bank. According to Wang Shirong, General Manager of Chery- HuiShang Bank Auto Financing Co., Ltd, the auto financing company is an important part in the automobile industrial chain. On the one hand, it can provide credit services for distributors who need money. On the other hand, consumers can get car loans from the company as well. "Our primary goal is to promote the sale of cars. Auto financing company can make the car sale more smooth and therefore support the running of the whole industrial chain." said Wang Shirong. He also stated that according to international experience, auto financing has become the most profitable part in the automobile industrial chain. In foreign countries, the revenue of auto financing company has already accounted for 30 percent to 50 percent of their mother company on an average.