China Auto Loan Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR | 8.00 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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China Auto Loan Market Analysis
China's auto loan market has a transaction value of USD 308.24 billion in the current year and is poised to register a CAGR of more than 8% for the forecast period.
Total automobile sales in China are observing a continuous increase, with the sales of passenger vehicles far exceeding the commercial vehicles. Penetration of auto financing is observing a continuous increase in the country, with more than 50% of vehicle buyers taking auto finance. Auto finance companies and commercial banks in the country are emerging as major auto loan providers for expanding the share of Auto loans in the composition of lending in China. Even post-covid, the China government is taking initiatives to expand sales of automobiles through affordable financing.
For passenger vehicles, SUVs and Medium cars occupy more than 60% of the sales, resulting in automobile loan providers designing specific products as per sales and price of these segments. Post-COVID-19, the interest rate on borrowing in China is observing a decline with the accommodative policy of the central bank, resulting in an increasing number of people financing their vehicle purchases. With a rural-urban spread, rural areas exist with a share of 44% of country automobile sales, and the remaining 56% of sales are in urban centers, making auto loan providers focus both on the rural and urban centers.
In the emerging automobile market, as manufacturers are launching Electric vehicles combined with government initiatives, lending companies are offering a lucrative interest rate on Electric vehicle loans to promote their sales and increase their ESG scores. With these efforts, China is leading globally in the sales of electric vehicles, having more than 4 Million sales last year, and even in battery vehicles had the largest share. Lenders are adopting digital lending channels and the availability of long-term loans with competitive interest rates to attract a major share of vehicle buyers to opt for automobile loans.
China Auto Loan Market Trends
Rising Sales of Passenger Vehicles
Among the automobile sales in China, passenger vehicles exist with a major share of around 70%, making it an attractive segment for automobile loan providers. The sales of passenger vehicles in the country last year were at more than 17 million, with SUVs and medium cars occupying a major segment of the market. With a decline in the growth rate of passenger vehicle sales during the pandemic, post-COVID-19, the sales are observing an increase with rising pent-up demand of people and innovative policy initiatives taken by banks for reducing the interest rates on loans. Passenger vehicle manufacturers, with an increase in their vehicle sales, are offering their own flexible and tailor-made financial services to buyers to make vehicle purchases easier and more convenient. BYD, FAW, Great Wall, and Sinotruk are among some of the emerging manufacturers in passenger vehicle sales, and by partnership with the Auto Loan market or launching their innovative finance products are leading the auto loan market in a new direction.
Rising Auto Loan by NBFC
NBFC exists as a financial institution offering various banking services without having access to a banking license. The market share of NBFC in China automobile finance is observing a continuous rise with a declining rate of interest on vehicle loans and rising automobile product sales. With options of borrowing the full amount of the used and new vehicle price, the loan products had been made more flexible and user-friendly. Potential buyers of automobiles in China exist within the employed age group of 25-44, resulting in a major focus of NBFC towards attracting this range of buyers through advertisements and varying attractive offers. The share of NBFC in the overall automobile loan in China has observed a continuous rise over the years, with auto sellers themself offering the buyers credit facilities, reducing the business of banks in automobile loans. Over the period, SAIC Motors Finance, BYD Auto Finance, and Herald International Finance have emerged among some of the leading companies in China for Auto loans.
China Auto Loan Industry Overview
China's auto loan market is fragmented, with a large number of banks, OEN, Credit unions, and financial services providing their loan. Existing players are competing in the market players to provide a competitive interest rate with long-term credit facilities, and digital innovations by lending companies are taking the market in a new direction. Some of the existing players in China's Auto Loan market are China Merchant Bank, China Minsheng Bank, SAIC Finance, China Bank, and Bank of China.
China Auto Loan Market Leaders
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China Merchant Bank
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China Minsheng Bank
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SAIC Finance
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China Bank
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Bank of China
*Disclaimer: Major Players sorted in no particular order
China Auto Loan Market News
- July 2022: The China Ministry of Commerce rolled out incentives consisting of easy credit extended to car buyers for raising sales of the NEV sector, which comprised pure electric, plug-in hybrid, and hydrogen fuel-cell cars. This policy raised sales opportunities for major electric-car makers BYD, Xpeng, Li Auto, and Nio Stand in China.
- June 2023: The Chinese authorities, with recovery from the COVID-19 pandemic, launched a nationwide campaign to promote automobile purchases and raise demand in its auto market. The initiative includes encouraging financial institutions to introduce measures for boosting lending for auto purchases and rolling out policies and measures in favor of car consumption.
Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS AND INSIGHTS
- 4.1 Market Overview
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4.2 Market Drivers
- 4.2.1 Increase In Demand For Passenger Vehicles
- 4.2.2 Quick Processing of Loan through Digital Banking
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4.3 Market Restraints
- 4.3.1 Declining Business of Banks with Financial Companies Entry
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4.4 Market Opportunities
- 4.4.1 Flexible Interest Rate by Financing Companies Making Raising their Auto Loan Share
- 4.4.2 Emerging Market of Electric Vehicles Expanding the Auto Loan Market
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4.5 Industry Attractiveness - Porter's Five Forces Analysis
- 4.5.1 Bargaining Power of Suppliers
- 4.5.2 Bargaining Power of Buyers
- 4.5.3 Threat of New Entrants
- 4.5.4 Threat of Substitutes
- 4.5.5 Intensity of Competitive Rivalry
- 4.6 Technological Innovations in China Auto Loan Market
- 4.7 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
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5.1 By Vehicle Type
- 5.1.1 Passenger Vehicle
- 5.1.2 Commercial Vehicle
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5.2 By Ownership
- 5.2.1 New Vehicle
- 5.2.2 Used Vehicle
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5.3 By End User
- 5.3.1 Residential
- 5.3.2 Commercial
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5.4 By Loan Provider
- 5.4.1 Banks
- 5.4.2 OEM
- 5.4.3 Credit Unions
- 5.4.4 Other Loan Providers
6. COMPETITIVE LANDSCAPE
- 6.1 Market Concentration Overview
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6.2 Company Profile
- 6.2.1 China Merchant Bank
- 6.2.2 China Minsheng Bank
- 6.2.3 SAIC Finance
- 6.2.4 China Bank
- 6.2.5 Bank of China
- 6.2.6 BYD Auto Finance
- 6.2.7 Volkswagon Finance
- 6.2.8 Herald International
- 6.2.9 Caixa Bank
- 6.2.10 China Bohai Bank*
7. MARKET FUTURE TREND
8. DISCLAIMER AND ABOUT US
China Auto Loan Industry Segmentation
An automobile loan allows a user to borrow money from a lender and use it to purchase different forms of vehicles, which include Passenger and commercial vehicles. The loan is paid back to the issuer in the form of installments over some time with an agreed amount of interest payment.
China's auto loan market is segmented by vehicle type (passenger vehicles, commercial vehicles), by ownership (new vehicles, used vehicles), by end-user (individuals, enterprises), and by loan provider (banks, OEMs, credit unions, and other loan providers).
The report offers market sizes and forecasts for the China auto loan market in value (USD) for all the above segments.
| By Vehicle Type | Passenger Vehicle |
| Commercial Vehicle | |
| By Ownership | New Vehicle |
| Used Vehicle | |
| By End User | Residential |
| Commercial | |
| By Loan Provider | Banks |
| OEM | |
| Credit Unions | |
| Other Loan Providers |
Frequently Asked Questions
What is the current China Auto Loan Market size?
The China Auto Loan Market is projected to register a CAGR of greater than 8% during the forecast period (2024-2029)
Who are the key players in China Auto Loan Market?
China Merchant Bank, China Minsheng Bank, SAIC Finance, China Bank and Bank of China are the major companies operating in the China Auto Loan Market.
What years does this China Auto Loan Market cover?
The report covers the China Auto Loan Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the China Auto Loan Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
China Auto Loan Industry Report
Statistics for the 2024 China Auto Loan market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. China Auto Loan analysis includes a market forecast outlook to for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
