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Car Finance - China - August 2018

“Chinese consumers’ car financing methods are still conservative, especially consumers in tier two cities. Bank is the main car finance method for consumers. The top three methods that surveyed respondents chose are household savings, car-specific loans from banks and personal savings (48%, 46% and 46% respectively). On the other hand, for those consumers who use car finance, lending rate and monthly repayment have a high importance level when it comes to car finance selection. In addition, the second-hand car market has a great influence on consumers’ choices of car finance.”

- Terence Zhou, Research Analyst

This report will cover the following areas:

  • Second-hand car market has strong effect on new car finance
  • Education of consumers’ understanding about car finance

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Excluded
        • Executive Summary

            • The market
              • Figure 1: Car finance market size in China, 2013-17
            • Car finance market forecast to reach RMB 2,526 billion in 2023
              • Figure 2: Best- and worst-case forecast of total car finance value, China, 2013-23
            • Companies and brands
              • Figure 3: Car finance companies’ market share, 2015-17
            • The consumer
              • Bank is the main funding method
                • Figure 4: Car finance methods, April 2018
              • 30-39-year-old males are core users of car finance
                • Figure 5: Car finance methods, by age, April 2018
                • Figure 6: Car finance methods, by gender, April 2018
              • Major loan range is from 20%-70%
                • Figure 7: Loan percentage, April 2018
              • Lending rate and monthly repayment have high importance level for car finance users
                • Figure 8: Important car loan application factors – TURF Analysis, April 2018
              • Sufficient savings for car consumption
                • Figure 9: Reasons for not using car loan services, April 2018
              • Second-hand market worth paying attention to by car loan providers
                • Figure 10: General attitudes towards second-hand cars, April 2018
              • What we think
              • Issues and Insights

                • Second-hand car market has strong effect on new car finance
                  • The facts
                    • The implications
                      • Education of consumers’ understanding about car finance
                        • The facts
                          • The implications
                            • Opportunities for car dealer finance
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Fast growth in the past five years
                                    • Car sales volume dominates the market size
                                      • Stimulation from consumers’ target car price
                                      • Market Size and Forecast

                                        • Fast growth in the past five years
                                          • Figure 11: Car finance market size in China, 2013-17
                                        • Car finance market forecast to reach RMB 2,526 billion in 2023
                                          • Figure 12: Best- and worst-case forecast of total car finance value, China, 2013-23
                                      • Market Drivers

                                        • Car sales volume dominates the market size
                                          • Figure 13: Sales volume and growth rate of cars in China, 2013-17
                                        • Car sales volume continues to increase in recent years
                                          • Figure 14: Comparison of sales volume of second-hand and new passenger cars, 2010-17
                                        • Persistent growth of Chinese finance industry
                                          • Figure 15: Chinese finance industry value added and percentage account for GDP, 2010-16
                                          • Figure 16: Total third-party payment and growth rate, China, 2012-16
                                        • Stimulation from consumers’ target car price
                                        • Key Players – What You Need to Know

                                          • Bank loans dominate the car finance market
                                            • Car dealers provide various finance solutions
                                              • Volkswagen Financial Services is simplifying the application process
                                              • Market Share

                                                • Bank loans dominate the car finance market
                                                  • Figure 17: Car finance companies’ market share, 2015-17
                                                • Intense competition at the top of the market
                                                  • Figure 18: Top 10 car finance companies, by revenue, 2017
                                              • Competitive Strategies

                                                • Car dealers provide various finance solutions
                                                  • Second-hand car finance
                                                    • New car finance mode from Tangeche
                                                    • Who’s Innovating?

                                                      • Volkswagen Financial Services is simplifying the application process
                                                        • AI application on auto finance
                                                          • Partnership with third-party car search websites
                                                          • The Consumer – What You Need to Know

                                                            • Bank is the main funding method
                                                              • Lending rate and monthly repayment have high importance level for car finance users
                                                                • Consumers will check the second-hand market about the models they want to buy
                                                                • Payment Methods

                                                                  • Bank is the main funding method
                                                                    • Figure 19: Car finance methods, April 2018
                                                                    • Figure 20: Car finance methods – Repertoire Analysis, April 2018
                                                                    • Figure 21: Car finance methods of those who have chosen 2 types of financing methods, April 2018
                                                                  • Car dealer loan users are limited in financing choices
                                                                    • Figure 22: Car finance methods, April 2018
                                                                  • 30-39-year-old males are core users of car finance
                                                                    • Figure 23: Car finance methods, by age, April 2018
                                                                    • Figure 24: Car finance methods, by gender, April 2018
                                                                    • Figure 25: Car finance methods, by personal monthly income, April 2018
                                                                  • 40-49-year-olds like to use savings to buy cars
                                                                    • Figure 26: Car finance methods, by age, April 2018
                                                                  • Different finance choices between city tiers
                                                                    • Figure 27: Car finance methods, by city tiers, April 2018
                                                                  • The higher the education, the more likelihood to use car finance
                                                                    • Figure 28: Car finance methods, by education, April 2018
                                                                  • Replacement car buyers have high tendency to use car finance
                                                                    • Figure 29: Car finance methods, by different car owners and buyers, April 2018
                                                                • Loan Percentage

                                                                  • Major loan range is from 20%-70%
                                                                    • Figure 30: Loan percentage, April 2018
                                                                  • Strengthen loan solutions at a range of 30%-60% of car price
                                                                    • Figure 31: Gap between different loan amount preferred and the general average (benchmark) on the selection of loan providers, April 2018
                                                                • Decisions at the End of Financial Lease Plan

                                                                  • Most consumers choose to pay the rest and own the car
                                                                    • Figure 32: Dealing methods at the end of financial lease plan, April 2018
                                                                  • Female tend to try more models by financial lease
                                                                    • Figure 33: Dealing methods at the end of financial lease plan, by gender, April 2018
                                                                • Car Loan Selection Factors

                                                                  • Divided opinions on factors that will affect car loan application
                                                                    • Figure 34: Important car loan application factors, April 2018
                                                                  • Lending rate and monthly repayment have high importance level for car finance users
                                                                    • Figure 35: Important car loan application factors – TURF Analysis, April 2018
                                                                  • High-income consumers think beyond the box
                                                                    • Figure 36: Important car loan application factors, by monthly personal income, April 2018
                                                                    • Figure 37: Important car loan application factors, by monthly personal income, April 2018
                                                                    • Figure 38: Important car loan application factors, by monthly personal income, April 2018
                                                                  • Tier two and three city car buyers pay more attention to the loan itself
                                                                    • Figure 39: Important car loan application factors, by city tiers, April 2018
                                                                  • Consumers who value current wealth management return rate
                                                                    • Figure 40: Important car loan application factors, by age, April 2018
                                                                    • Figure 41: Important car loan application factors, by housing situation, April 2018
                                                                    • Figure 42: Important car loan application factors, by monthly household income, April 2018
                                                                  • Different advantages of different car finance methods
                                                                    • Figure 43: Loan methods taken, by select important factors, April 2018
                                                                    • Figure 44: Loan methods taken, by select important factors, April 2018
                                                                    • Figure 45: Loan methods taken, by select important factors, April 2018
                                                                    • Figure 46: Loan methods taken, by select important factors, April 2018
                                                                    • Figure 47: Car finance methods, by city tiers, April 2018
                                                                    • Figure 48: Car prices, by city tiers, July 2017
                                                                • Barriers to Using Car Loans

                                                                  • Sufficient savings for car consumption
                                                                    • Figure 49: Reasons for not using car loan services, April 2018
                                                                  • Generations at the two ends do not like owing debts
                                                                    • Figure 50: Reasons for not using car loan services, by generation, April 2018
                                                                    • Figure 51: Reasons for not using car loan services, by selected demographics, April 2018
                                                                  • Conservative mindsets about car loans in tier two cities
                                                                    • Figure 52: Reasons for not using car loan services, by city tiers, April 2018
                                                                • Attitudes towards Second-hand Cars

                                                                  • Consumers will check the second-hand market about the models they want to buy
                                                                    • Figure 53: General attitudes towards second-hand cars, April 2018
                                                                  • Sophisticated consumers care about second-hand market when buying a new car
                                                                    • Figure 54: General attitudes towards second-hand cars, by gender and age, April 2018
                                                                    • Figure 55: General attitudes towards second-hand cars, by monthly personal income, April 2018
                                                                    • Figure 56: General attitudes towards second-hand cars, by family structure, April 2018
                                                                    • Figure 57: General attitudes towards second-hand cars, by city tiers, April 2018
                                                                  • 30-39-year-old females prefer buying cars appearing frequently on the second-hand market
                                                                    • Figure 58: General attitudes towards second-hand cars, by gender and age, April 2018
                                                                  • Attentions on second-hand market are loan solution-predictable
                                                                    • Figure 59: Dealing methods at the end of financial lease plan, by general attitudes towards second-hand cars, April 2018
                                                                    • Figure 60: Dealing methods at the end of financial lease plan, by general attitudes towards second-hand cars, April 2018
                                                                    • Figure 61: General attitudes towards second-hand cars, by dealing methods at the end of financial lease plan, April 2018
                                                                • Meet the Mintropolitans

                                                                    • Figure 62: Car finance methods, by consumer classification, April 2018
                                                                    • Figure 63: Important car loan application factors, by consumer classification, April 2018
                                                                • Appendix – Market Size and Forecast

                                                                    • Figure 64: Total market value of car finance, 2013-23
                                                                • Appendix – Methodology and Abbreviations

                                                                  • Methodology
                                                                    • Fan chart forecast
                                                                      • Abbreviations

                                                                      Car Finance - China - August 2018

                                                                      US $4,460.00 (Excl.Tax)