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Booming Demand for Vehicles Drives the Automotive Finance Markets in China

Posted on: Wednesday, 15 March 2006, 09:00 CST

PALO ALTO, Calif., March 15 /PRNewswire/ -- The growing demand for vehicles coupled with increasing awareness about available automotive financial options is presenting abundant opportunities for the automotive financial markets in China.

The liberalization of regulations and restrictions due to the open door policy announced in 1998 and the timely rise in the number of captive licenses approved by the Chinese Government are also driving the growth of these markets.

Frost & Sullivan (http://www.transportation.frost.com/ ) finds that the Chinese Automotive Finance Markets earned revenues of $4.90 billion in 2004 and estimates it to reach $12.70 billion in 2011.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the Chinese Automotive Finance Markets, then send an e-mail to Alice Chia -- Corporate Communications, at alice.chia@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the information through e-mail upon receipt of the above information.

"The markets are witnessing a transition in car buyers' preference for various financial options from the conventional means of purchase through cash," states the Frost & Sullivan Industry Analyst Amelia Wong.

Finance providing companies are vigorously organizing promotional activities to educate their customers, ultimately offering greater product differentiation and superior services.

However, participants in the Chinese automotive finance markets need to overcome the high level of non-performing loans, which account for 50.0 percent of the total number of outstanding loans. Besides bad loans and fraud-related concerns that started surfacing in 2003, improper allotment of automotive loans without following proper rating procedures and inadequate investigation of customers' credibility is contributing to the high-default rates.

"Nevertheless with the establishment of credit rating and reporting systems in the markets, automotive finance institutions have become more adept at controlling the financial risk and enhancing their efficiency while evaluating customers' applications," notes Wong.

Encouragingly, China Banking Regulatory Commission (CBRC) is now granting approval to more financial institutions such as incorporated or shareholding commercial banks, urban and rural credit cooperatives, as well as captive finance companies to venture into these markets.

The resulting competition between these finance units is providing convenient options such as flexible loan terms and deposits to prospective automotive buyers.

Overall, diverse factors such as the increasing demand for vehicles, rising personal disposable income, along with liberalization of Government regulations are attracting more companies. These are helping drive the market.

The Chinese Automotive Finance Markets provides an overview of and outlook for the aforementioned markets and segments them into total automotive, new car, as well as used car finance markets. This research service includes detailed market opportunities and industry trends evaluated following extensive interviews with market participants. It enables market participants to design strategies and position their services to benefit from the changing market conditions and obtain maximum return on investments. Analyst interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com/ .

Chinese Automotive Finance Markets 4B76 Contact: Alice Chia Corporate Communications - Asia Pacific P: +603 6204 5899 F: +603 6201 7402 E: alice.chia@frost.com Tolu Babalola Corporate Communications - North America P: 210.477.8427 F: 210.348.1003 E: tolu.babalola@frost.com Magdalena Oberland Corporate Communications - Europe P: +44 (0) 20 7915 7876 F: +44 (0) 20 7730 3343 E: magdalena.oberland@frost.com http://www.frost.com/

Keywords in this release: China, automotive, finance, total automotive, new car, used car, China Banking Regulatory Commission, CBRC, research, information, market, trends, technology, service, forecast, market share

Frost & Sullivan

CONTACT: Alice Chia, Corporate Communications - Asia Pacific,+603-6204-5899, or fax, +603-6201-7402, or alice.chia@frost.com , or ToluBabalola, Corporate Communications - North America, +1-210-477-8427, or fax,+1-210-348-1003, or tolu.babalola@frost.com , or Magdalena Oberland, CorporateCommunications - Europe, +44-0-20-7915-7876, or fax, +44-0-20-7730-3343, ormagdalena.oberland@frost.com , all of Frost & Sullivan

Web site: http://www.frost.com/http://www.transportation.frost.com/

Source: PRNewswire

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