China, the world's largest car market, will soon have policies that will promote auto lending. Currently, about 90% of the customers in China pay in cash. That is why many of them opt to buy a cheaper car instead of the one they really prefer.
The carmakers that are eagerly anticipating these policies to be implemented in China include Ford Motor Co., Nissan Motor Co., Beijing Automotive Industry Holding Co. and Guangzhou Automobile Group Co.
In an interview at the Beijing Auto Show late last month, Joe Hinrichs, Ford's president for the Asia-Pacific region, said that the company sees "a lot of potential in auto financing." Carmakers predict that the sales growth in China will fall next year to 10%. This year, the growth is expected to be at 20% while in 2009, sales grew by 46%.
On April 22, Xu Changming, research director at China's State Information Center, was interviewed in Beijing. Xu Changming said that lending money to China's 1.37 billion population for cars would result to a "big stimulus impact" on sales.
Yale Zhang, a Shanghai-based director at CSM Asia, an auto consulting company, is quick to agree. He said that for the next 5 to 10 years, auto financing will be considered "the biggest thing for the industry" as well as its most significant booster. [via autonews]