From the Financial Express
Zhongsheng Group Holdings Ltd , a large Chinese auto dealership group, said consumer financing is fast gaining acceptance in China, which will help boost the market as well as encourage younger buyers to buy more expensive cars.
Currently only one fifth of car buyers use financing at Zhongsheng’s 160 dealerships, with the rest paying cash. Countrywide, that ratio is even less with only 10 percent of consumers using financing.
Huang Yi, chairman and co-founder of the dealer group, says a conservative estimate calls for financing at Zhongsheng to rise to 30 percent within five years, adding that in 10 years, that should rise to more than half of new car buyers.
Younger buyers are less averse to taking on debt than their parents, Huang said in an interview on the sidelines of the Detroit auto show.
“For young people, maybe for no financing they can buy a car less than 100,000 yuan ($15,950), if they use financing they can buy a car of 200,000 yuan ($31,900),” Huang said.
The world’s biggest auto market saw sales rise 4.3 percent last year to 19.3 million vehicles and China’s auto industry body expects a climb of 7 percent this year.
Brands that are the most aggressive in offering financing at Zhongsheng’s dealerships are Toyota Motor Corp’s namesake brand and its luxury brand Lexus, and Daimler AG’s Mercedes-Benz brand, Huang said.