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Although the auto financing service has been available since a pilot was run by State-owned banks in May 1996, the sector still lags behind very far. According to statistics show that only 7 percent of Chinese consumers now apply for loans to buy autos. In August 2004, the first auto financing company, GMAC-SAIC Automotive Finance Co Ltd, established by General Motors Acceptance Corp and Shanghai Automotive Group Finance Corp, started its business in China.
However, there are only 10 auto financing companies providing services in the country after five years, and currently, according to Donghai Securities, only 6.6 to 7 percent of the Chinese consumers apply for loans from financial institutions to purchase autos, a figure far lower than the global average. In Western countries, auto financing accounts for 60 to 80 percent of vehicle sales. Many China"s automakers, including FAW Group, Chang"an Automobile Group Co, Brilliance Auto and Jianghuai Auto, are awaiting government approval to set up their own financing arms.
China still has huge potential auto financing market. Auto experts predict that China"s auto financing market may touch 550 billion Yuan by 2025.