DETROIT Jan 15 Zhongsheng Group Holdings Ltd
, a large Chinese auto dealership group, said consumer
financing is fast gaining acceptance in China, which will help
boost the market as well as encourage younger buyers to buy more
Currently only one fifth of car buyers use financing at
Zhongsheng's 160 dealerships, with the rest paying cash.
Countrywide, that ratio is even less with only 10 percent of
consumers using financing.
Huang Yi, chairman and co-founder of the dealer group, says
a conservative estimate calls for financing at Zhongsheng to
rise to 30 percent within five years, adding that in 10 years,
that should rise to more than half of new car buyers.
Younger buyers are less averse to taking on debt than their
parents, Huang said in an interview on the sidelines of the
Detroit auto show.
"For young people, maybe for no financing they can buy a car
less than 100,000 yuan ($15,950), if they use financing they can
buy a car of 200,000 yuan ($31,900)," Huang said.
The world's biggest auto market saw sales rise 4.3 percent
last year to 19.3 million vehicles and China's auto industry
body expects a climb of 7 percent this year.
Brands that are the most aggressive in offering financing at
Zhongsheng's dealerships are Toyota Motor Corp's
namesake brand and its luxury brand Lexus, and Daimler AG's
Mercedes-Benz brand, Huang said.
Those who finance their cars now typically pay 30 percent of
a vehicle's price as down payment and the loans have interest of
7 percent to 8 percent, Huang said.
Huang also said that the company's sales of Japanese brands
has nearly fully recovered after the territorial row in
mid-September that sparked anti-Japanese sentiment in China.
That cut sales of Japanese brands at Zhongsheng stores by 70
percent, Huang said.
In the last two weeks of December, sales of Toyota and
Nissan Motor Co had returned to nearly 90 percent of
levels before the dispute over ownership of islands in the East
Toyota reported a 16 percent decline in China sales for the
whole month of December while Nissan reported a 24 percent fall.
Zhongsheng, whose dealerships stretch from Heilongjiang
province in the north to Guangdong in the south, expects to
double the amount of its dealerships in the next five years.
(Editing by Edwina Gibbs)