Toyota is considering launching a vehicle loan service in China in an effort to boost its sales in the rapidly growing market, Dow Jones reported.

The report said Toyota would join many of its rivals who have been rushing into the vehicle financial business in China, including General Motors.

Dow Jones noted that analysts see large potential for the vehicle financing market in China, as less than 20% of domestic vehicle sales are funded through loans, compared to around 70% in developed countries.

The report said that Toyota, a relative latecomer in China, hopes a loan service will spark demand from middle-income customers, as owning a car in China is currently limited to high-income earners, and Toyota aims to catch up with rivals that have had a head-start in China, such as Volkswagen.

Dow Jones said industry observers expect Chinese financial regulators to establish a legal system under which foreign companies will be able to make vehicle loans, following Beijing's decision in early October to allow foreign companies into the market - currently, only large Chinese banks are allowed to provide vehicle loans.

Other car makers are also preparing for the car loan business in China, Dow Jones said, noting that Ford said earlier this month it is in negotiations with Chinese authorities to set up its Ford Credit car-financing business, while, the Nihon Keizai Shimbun reported earlier this week that GM and DaimlerChrysler will begin offering car loans in China, possibly early next year.