The financing division of General Motors is poised to enter China’s nascent car financing business, with the prospect of the country opening up its financial sector following its accession to the World Trade Organisation late last year. The chief executive of General Motors Acceptance Corporation, Scott Reno, told SCMP.com that his firm was planning a joint venture with a prominent local partner. It will provide a range of services including car loans, mortgages, insurance and licensing. Other foreign motor companies such as Volkswagen and Ford were reported to be considering similar ventures in China.
Car loans account for under 10 per cent of total car sales in China, compared with up to 70 per cent in some Western countries. Mainland banks only started offering the service in 1998, and their terms are very strict because of the absence of a developed credit network.