The interest rate increase of China’s central bank a week ago will have little impact on the domestic car market, according to analysts.
The central bank raised benchmark rates on one-year yuan loans to 5.58 per cent from 5.31 per cent and that on one year deposits to 2.25 per cent from 1.98 per cent last Thursday to cool economic growth.
“We have not seen impact of the rate rise as it is very small. The domestic car market maintains a stable track,” said Zhu Yiping, the spokeswoman of the China Association of Automobile Manufacturers.
But the association has not revealed auto sales for October.
“The rate increase will not have a big impact on the domestic car market as only a small number of car buyers are using loans at present,” said Qian Pingfan, an industry researcher of the Development Research Centre of the State Council.
Around 10 per cent of new car sales in China are using loans, down from 30 per cent a year earlier, mainly because many Chinese commercial banks have enhanced the threshold for auto financing and even halted business because of concerns about bad loans.
Following the central government’s move, General Motors Acceptance Corp’s branch in Shanghai raised its three-year and five-year interest rates of auto loans to 6.99 per cent and 7.33 per cent on Monday from 6.66 per cent and 6.99 per cent respectively.
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