Source: CCTV.com

01-15-2009 11:16

Car makers and dealers are also offering sweeter credit deals to try to get customers behind the wheel sooner.

This woman wants a car so she can drive to work every day. But she's short of cash, so a car dealer's loan plan catches her attention. The plan requires only 50 percent down payment, and the rest can be paid within the next year, with zero interest.

Car makers and dealers are also offering sweeter credit deals  to try to get customers behind the wheel sooner.

Miss Shao, a car buyer, says, "I haven't been working very long, and my purchasing power is limited. But I really want a car. This car loan is really helpful for me. "

But there are few car loans like this in China. Less than 10 percent of car buyers use credit to buy cars, compared to 85 percent in the US.

According to the China Association of Automobile Manufacturers, just over 9.38 million cars were sold across the country in 2008, 7 percent less than a year ago, the slowest growth in last decade. As the government aims to lift the growth rate to 12 percent in the next three years, some experts are suggesting that the institutions who offer car loans should cut their rates. The current rates are 40 percent higher than bank lending rates, and some suggest they be slashed by half.

Xu Changming, director of Info. Resources Dept, National Info. CTR, says, "Auto finance in China lags far behind the US and Europe. If we develop auto finance further, car consumption will get a leg up."

Experts say the government is encouraging the promotion of car finance as an important part of the its plan to boost the auto industry. It would also boost development of the finance sector and auto services sector. Car loan policies need to be further reformed to increase demand.

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Editor:Qin Yongjing