Low penetration offers space for auto loans to grow
Print Edition
AUTO financing is an emerging business in China and there is great potential for it to grow further since it has only penetrated less than 30 percent of the market, an industry survey published by consulting firm J.D. Power yesterday.
Car buyers now consider auto financing, which offers auto loans, to be a key driver for brand loyalty and decision to repurchase in China, the survey said.
About 30 percent of consumers purchased the same brand because of auto financing and 95 percent of car buyers said they intended to use auto finance again for their next vehicle purchase.
“Auto financing plays an increasingly critical role in driving Chinese consumers’ vehicle purchase decisions,” said Jacob George, vice president and general manager at J.D. Power Asia Pacific.
The provision of auto financing services can also help carmakers and dealers differentiate themselves in a highly competitive Chinese market.
“That (auto financing) is also becoming an essential driver of customer satisfaction and their own business performance,” George said.
The survey found that 38 percent of Chinese customers who used auto financing to buy a car said they would have postponed their purchase if it had not been available. Another 10 percent indicated they would have not purchased a vehicle.
The survey shows that auto financing penetrated under 30 percent of the market in China, whereas in the US it accounted for over 80 percent, indicating great potential for the business to expand here.
Chinese consumers, however, said salespeople at dealerships also play a critical role providing information about auto financing and leasing. Around 19 percent of customers said the salespeople helped them choose an auto finance provider.
Having the assistance of a sales consultant in the financing application process generated a highest score of 811 on a 1,000-point scale for customer satisfaction, according to the survey.
The survey, covering a total of 9,204 buyers of new vehicles in 71 cities throughout China, was conducted from March to April this year.
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