Business / Latest News

Leasing plays little role in world's largest market

By Li Fusheng (China Daily) Updated: 2014-04-28 06:36

Leasing plays little role in world's largest market
Beijing's first pure-electric vehicle leasing firm was established at Tsinghua University Science Park. Experts say new-energy vehicles will one day be a driving force in auto leasing. Wu Changqing / For China Daily

Less than 5% of all deliveries, yet in the US it's a 46% share

Though China continues to make and sell the most cars of any country in the world, vehicle leasing remains a largely untapped sector that lags far behind mature markets, said experts and insiders.

Naeem Aftab, general manager of NetSol Technologies Inc, a company that provides asset finance and leasing software, said statistics from the China Leasing Union show leases of all kinds totaled 1.55 trillion yuan in 2012, but only a meager 25.7 billion was in the auto industry.

Wang Yong, general manager of Tonbright Finance Leasing Co, said leasing accounted for 46 percent of total new car deliveries in the US but less than 5 percent in China.

Leasing plays little role in world's largest market
China Auto signs strategic alliance

Leasing plays little role in world's largest market
Volkswagen partners with SAIC, FAW to develop, produce new-energy vehicles

"It will be a large market," said Wang in an interview with Money Week, adding that leasing is especially attractive to small and medium-sized companies.

"Companies emphasize cash flow - and auto leasing is something they want," Wang said.

Tonbright has leased vehicles to more than 500 companies since it was established in early 2013, said Wang.

The China Association of Automobile Manufacturers estimates the market size could reach 525 billion yuan by 2015.

And new-energy vehicles will be a major driving force in the sector, according to a report from the Shanghai Leasing Services & Exchange.

"Hybrid and electric vehicles are gaining popularity as petroleum prices are soaring and there is a universal call for carbon emission reduction," it said.

In addition to finance companies, many auto manufacturers and dealerships across the country are also offering leasing.

The industry is also receiving more government support in many cities, according to the China Securities Journal. The Guangzhou government has vowed to make the city the largest auto leasing market in China, the report said.

Despite bright prospects, industry insiders said the auto leasing industry will not grow rapidly until some obstacles are removed .

Previous Page 1 2 Next Page

Hot Topics

Editor's Picks
...
...