The growing demand for vehicles coupled with increasing
awareness about available automotive financial options
has been presenting abundant opportunities for the automotive
financial markets in China, reveals a Frost & Sullivan
report, Chinese Automotive Finance Markets, finds
that the Chinese automotive finance markets earned revenues
of $4.90 billion in 2004 and estimates it to reach $12.70
billion in 2011.
The growth of the market is being driven by the liberalisation
of regulations and restrictions due to the open door
policy announced in 1998 and the timely rise in the
number of captive licenses approved by the Chinese government.
markets are witnessing a transition in car buyers' preference
for various financial options from the conventional
means of purchase through cash," states the Frost
& Sullivan industry analyst Amelia Wong.
providing companies are vigorously organising promotional
activities to educate their customers, ultimately offering
greater product differentiation and superior services.
participants in the Chinese automotive finance markets
need to overcome the high level of non-performing loans,
which account for 50.0 percent of total outstanding
bad loans and fraud-related concerns that started surfacing
in 2003, improper allotment of automotive loans without
following proper rating procedures and inadequate investigation
of customers' credibility is causing high-default rates.
with the establishment of credit rating and reporting
systems in the markets, automotive finance institutions
have been more adept at controlling the finance risk
and in enhancing their efficiency while evaluating customers'
applications," notes Wong.
the China Banking Regulatory Commission (CBRC) is now
granting approval to more number of financial institutions
such as incorporated or shareholding commercial banks,
urban and rural credit cooperatives, as well as captive
finance companies to venture into these markets.
resulting competition between these finance units is
providing convenient options such as flexible amounts
and terms of loans and deposits to prospective automotive
diverse factors such as the increasing demand for vehicles,
rising personal disposable income, along with liberalisation
of government regulations are attracting more companies,
which is eventually driving the markets.
Chinese Automotive Finance Markets provides an overview
of and outlook for the Chinses auto finance markets
and segments them into total automotive, new car, as
well as used car finance markets. This research service
includes detailed market opportunities and industry
trends evaluated following extensive interviews with
enables market participants to design strategies and
services to benefit from the changing market conditions
and obtain maximum return on investments. Analyst interviews
are available to the press.