China's auto finance industry has great potential to further grow in the coming years, according to a recent report published by consultancy firm Deloitte.
"We can see business volumes relocate from traditional markets such as the US and Europe to emerging markets like China," Sebastian Pfeifle, global auto finance head at Deloitte, said in an interview with Shanghai Daily.
Pfeifle added that although the penetration rate of auto finance in China is still lower than developed markets, more and more people here will try to use auto finance when they purchase cars in the future.
By 2030, China will account for nearly one third of total auto finance service contracts provided by automakers to car buyers around the world.
China is already the largest auto market in the world, and its car sales are expected to grow further in the next five to ten years. This brings huge opportunity to the development of the auto finance sector.
China is very important for global auto companies if they want to achieve success. The report pointed out that for global car-makers involved in the auto finance business, about 26 percent of their related profit before tax will come from the Chinese market by 2030.
Pfeifle said that if automakers want to succeed in auto financing in China, they need to provide flexible and convenient auto finance packages. For example, companies need to provide different contract durations and different modes of down payment for Chinese customers.
There are three main channels for Chinese consumers to approach auto finance currently: automakers who have auto finance subsidiary companies, commercial banks who provide auto finance products, and online auto finance companies.
Kelly Zhou, auto finance and insurance consulting director at Deloitte China, said auto finance companies need to focus on digital channels and connected services in order to adapt to the changing market and attract more customers.
Cover illustration: VCG