Market Trends of China Auto Loan Industry
Rising Sales of Passenger Vehicles
Among the automobile sales in China, passenger vehicles exist with a major share of around 70%, making it an attractive segment for automobile loan providers. The sales of passenger vehicles in the country last year were at more than 17 million, with SUVs and medium cars occupying a major segment of the market. With a decline in the growth rate of passenger vehicle sales during the pandemic, post-COVID-19, the sales are observing an increase with rising pent-up demand of people and innovative policy initiatives taken by banks for reducing the interest rates on loans. Passenger vehicle manufacturers, with an increase in their vehicle sales, are offering their own flexible and tailor-made financial services to buyers to make vehicle purchases easier and more convenient. BYD, FAW, Great Wall, and Sinotruk are among some of the emerging manufacturers in passenger vehicle sales, and by partnership with the Auto Loan market or launching their innovative finance products are leading the auto loan market in a new direction.
Rising Auto Loan by NBFC
NBFC exists as a financial institution offering various banking services without having access to a banking license. The market share of NBFC in China automobile finance is observing a continuous rise with a declining rate of interest on vehicle loans and rising automobile product sales. With options of borrowing the full amount of the used and new vehicle price, the loan products had been made more flexible and user-friendly. Potential buyers of automobiles in China exist within the employed age group of 25-44, resulting in a major focus of NBFC towards attracting this range of buyers through advertisements and varying attractive offers. The share of NBFC in the overall automobile loan in China has observed a continuous rise over the years, with auto sellers themself offering the buyers credit facilities, reducing the business of banks in automobile loans. Over the period, SAIC Motors Finance, BYD Auto Finance, and Herald International Finance have emerged among some of the leading companies in China for Auto loans.
