Toyota has received approval to begin offering vehicle financing services in China, a step it hopes will eventually fan further growth in the world’s fourth-biggest car market.
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According to Reuters, Toyota expects to begin operations next month after completing the paperwork to formally establish the local finance firm, Toyota Motor Finance China Co.
The news agency noted the China Banking Regulatory Commission has so far given the nod to Volkswagen and General Motors, China’s two biggest car sellers, to offer car loans.
Ford also has initial approval, while DaimlerChrysler received it last week, the report added.
A Toyota spokeswoman told Reuters about one-fifth of Chinese car buyers use some form of credit, while the majority still pays cash.
Reuters noted that rules allowing non-bank institutions to set up car financing were issued in October 2003 by Beijing, fulfilling World Trade Organisation pledges more than a year late. Chinese banks had been offering the service since 1998, but they scaled back after a surge in the number of car loans that turned bad.
