Car financing a new bright spot in Chinese economy
Outstanding car loans climbed to 670 billion yuan last year from 5 billion yuan in 2005 as mainlanders switch to spending over saving
Buying a new car by taking out a loan has become increasingly popular with mainlanders and is likely to provide a catalyst for shifting the Chinese economy towards a growth model based on consumer spending.
A quarter of Chinese car buyers have borrowed money to finance their purchases, and the percentage is set to top 30 per cent soon, according to vehicle information website Autohome.
Chen Junjie, 35, a clerk with a state-owned company in Shanghai, said a car loan would enable him to get his hands on his dream car - a Mazda Atenza - much earlier than he would otherwise be able to.
“Paying several thousands of yuan to drive my own car one or two years ahead of schedule is not a bad choice,” he said. “We are in a new era when people are inclined towards spending, not saving.”
We are in a new era when people are inclined towards spending, not saving
The vehicle loan market has grown exponentially in China during the past decade. The outstanding amount jumped to 670 billion yuan last year, compared to 5 billion yuan in 2005, consultancy Forward Business and Intelligence said in a report.