Chinese auto consumption finance to accelerate

Volkswagen New Mobility Services Investment Co Ltd, Volkswagen Finance's wholly-owned subsidiary, completed its acquisition of Shanghai Zhenlang Transportation Equipment Leasing Co on Jan 7, 2013, 21st Century Business Herald reported on Tuesday.

China's market of auto consumption finance is to exceed one trillion yuan ($160.5 billion) in the next 10 years, the 2012 Auto Finance Report shows. By the end of 2011, this figure has been more than 300 billion yuan, said the report jointly issued by China Minsheng Banking Corp Ltd and Deloitte Consulting.

The penetration ratio of auto consumption finance will grow from the current 10 percent to 30 percent or higher in the next decade.

The report predicts that auto finance companies and credit card loans may contribute smaller market shares by revenue while the auto consumption finance market may expand to a size larger than one trillion yuan. Banks will see a sharp growth in personal auto consumption credit loans.

"At present, it is the financial agencies that restrict the expansion of personal auto consumption credit, not the consumers or the market. As soon as banks pay more attention to personal consumption credit in the future, the market penetration could exceed 30 percent." an expert said.