The People's Bank of
China, China's central bank, has issued draft rules on auto
loans, a growing sector expected to give China's fast-accelerating
car market a major boost.
The new regulations restrict the loan period to five years with
maximum outlay of 80 percent of the auto price, excluding taxes and
insurance, the central bank said on its website.
Last month the China
Banking Regulatory Commission gave the green light to General
Motors Corp., Toyota Motor Corp. and Volkswagen AG to start
offering car loans.
The three car giants are expected to set up auto-financing
operations in China in about six months' time, the commission
said.
Auto loans are forecast to increase by 80 billion yuan (US$9.6
billion) in 2003, up 71.6 billion yuan year-on-year from last year,
according to a government report issued by the State Development
and Reform Commission.
Over 100 billion yuan in loans were issued in 2002, according to
state estimates, with China's big four banks -- China Construction
Bank, Bank of China, Industrial and Commercial Bank of China and
Agricultural Bank of China, controlling 90 percent of the
market.
The rules also provide regulatory guidelines for personal auto
loans, distributor auto loans, group auto loans and risk
management, the report said.
(China Daily January 22, 2004)