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China mulls flexible car loan policy to encourage auto sales

Xinhua | Updated: 2016-12-27 15:45

China mulls flexible car loan policy to encourage auto sales

Visitors at an auto expo in Nanjing, East China's Jiangsu province, Oct 2, 2016. [Photo/VCG]

BEIJING - China is considering a flexible loan policy for car purchases to encourage automobile consumption, a major driving force for economic growth.

The loan-to-value ratio of automobile purchases will be flexible and set according to macroeconomic and automobile industrial conditions, according to a draft decision released by the central bank and the top banking regulator on Tuesday.

Previously, consumers could only borrow up to 80 percent of the total car price from banks.

The move is being considered to promote automobile consumption as another key driving force of the Chinese economy, the property market, is expected to slow down next year due to tightening policies.

Earlier this month, the Ministry of Finance decided to adjust and continue a preferential car purchase taxation policy set to expire by the end of this year with the aim of boosting automobile consumption.

Auto sales and output in China, the world's biggest auto market, continued to expand during the first 11 months, hitting an all-time high.

From January to November, about 25 million cars were sold in China, up 14.1 percent year on year, according to the China Association of Automobile Manufacturers.

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