Penetration of New-Vehicle and Used-Vehicle Financing in China Surges to 62% and 54%, Respectively

Automotive financing plays a critical role in driving the growth of the passenger vehicle market in China, with 62% of new-vehicle and 54% of used-vehicle transactions financed in 2021, according to the J.D. Power 2022 China Dealer Financing Satisfaction (DFS) Study,^SM.

The study, now in its eighth year, examines dealer satisfaction with finance providers in two segments, retail credit and floor planning. Retail credit is defined as the credit granted by auto financial providers to new-vehicle buyers while floor planning allows dealers to obtain loans from auto finance companies or banks to finance their inventory. The 2022 study is the first year the systematic measurements of used-vehicle retail credit, auto insurance and digital platform experiences have been included.

The J.D. Power 2022 China Dealer Attitude Study^SM (DAS), released in April, found that the percentage of auto finance commissions that comprise dealers’ overall profits rose to 14% in FY2021 from 9% in FY2020.

“In contrast to the volatile growth of passenger vehicle sales in recent years, the development of automotive finance is more stable and faster, and its contribution to dealers' profits has increased as well,” said Joseph Yang, director of auto finance practice at J.D. Power China. “With new retailing and smart mobility-related business models emerging, the automotive market in China will be full of opportunities and challenges, thus finance service providers need to solidify product and service innovation and embrace changes proactively.”

Read the full press release for additional key findings and brand rankings >