Global

Details

  • Industry: Automotive
  • Type: Survey report
  • Date: 9/24/2012

Finance and leasing landscape: China 

Finance and leasing landscape: China

China’s growing economy and car market translates into a significant opportunity in the automotive finance and leasing business. The opportunities in this market are for the early entry leaders to widen service and insurance offerings and to be poised as consumer habits change and business opportunities open up.

Market structure and business environment in China

Very strong market potential

  • Positive outlook for automotive finance and leasing due to increasing car sales figures and increasing finance need of the younger and educated population
  • Banks dominate the market with a market share of eighty percent
  • Currently 13 captives are present in the market
  • The entry of any non-captive financers also appears not overly common yet

Tight regulations – which are expected to soften

  • Tight requirements have to be fulfilled
  • “Auto Financing Company” license issued at the China Banking Regulatory Commission (CBRC)
  • It is likely that the strict regulatory framework around auto financing will be relaxed over the next few years
  • Narrow channels of refinancing and a restriction on intercompany funding

Serious risk potential

Risk potential - China


Business characteristics of Chinese finance and leasing market

  • The opening up of the market will provide further potential for captives
  • Chinese attitudes to credit are softening
  • Private customers account for ninety percent of cars bought outright with cash
  • Ninety-nine percent of company cars are paid for with cash but there is an increasing trend favouring operational leasing

Key Findings: Evaluating future financing and leasing growth in China

Traditional F & L services
Financing Services - Expand offerings
Leasing Services - Implement leasing offerings
SERVICES
Additional vehicle services - Widen service and insurance product offerings
Green mobility - Implement sophisticated products
New mobility solutions - Become an early entry leader
BANKING
Additional banking services - Be prepared for upcoming opportunities
Full banking activities - Focus on securitization and bonds


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automotive finance and leasing

About the study

Global automotive finance and leasing: The role of product diversification and emerging markets in future growth is based on desk research and in-depth interviews with senior executives representing key leasing and financing participants including banks, captives and independent auto leasing and financing organizations from China, France, Germany, India, Japan, Russia and the UK.

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