In the realm of credit, commercial vehicles used for business purposes are far more commonly utilized than passenger cars. Providers, distributors, and financial institutions must make initial efforts to ensure that future credit development becomes more successful. Starting from the fifth day of the Lunar New Year, the festive atmosphere has already filled the spring season. Under the backdrop of red lanterns and fireworks, China National Heavy Duty Truck (CNHTC) held its first auto consumer credit signing ceremony in 2008. A total of 157 Sinotruck dealerships and CNHTC product conversion companies across the country became eligible to launch this initiative, working alongside banks to provide consumer credit options for end users. This move significantly boosted enthusiasm among those immersed in the New Year celebrations, especially potential customers who had previously struggled with cash flow issues. Ni Guixiang, Minister of the CNHTC Propaganda Department, told Autobot: “The implementation of consumer credit has helped more car buyers realize their dream of purchasing a vehicle earlier, which will greatly boost the sales performance of the China National Heavy Duty Truck Group.” Win-win cooperation is essential. Due to the unique structure of commercial vehicles and their user base, consumer loans for these vehicles differ significantly from those for passenger cars. As a result, compared to the competitive passenger car market, the commercial vehicle credit sector remains relatively underdeveloped. Commercial vehicles are considered tools of production rather than personal consumption items. Many users purchase them for profit, making loans a cost-effective option. Given the high price of heavy-duty trucks—often reaching tens or even hundreds of thousands of yuan—consumer credit helps ease the financial burden on buyers. Without such options, many potential customers might be unable to afford the upfront cost, leading to lost sales. In this sense, consumer credit acts as a catalyst for commercial vehicle market growth. However, commercial vehicle credit also carries inherent risks. The industry's nature leads to higher credit risk, which has become a major obstacle to development. Both external and internal factors contribute to these risks, including social conditions and individual lender behaviors. Unlike family cars, commercial vehicle loan insurance is heavily influenced by external factors. If a user suffers an accident, business loss, or personal issue, they may struggle to continue payments. Additionally, the domestic credit system is still developing, and personal credit evaluation mechanisms are not fully established. In 2003, some regions saw auto loan insurance loss ratios as high as 136%, with certain companies reaching 400%. By that time, Sinotruk’s sales were over 70% dependent on such credit models. Banks have since become more cautious due to rising risks. For example, the Agricultural Bank of China reported non-performing rates of 0.74% for general car loans, 1.66% for freight vehicles, 1.08% for passenger cars, and 1.17% for other types. As a result, many banks have avoided this sector altogether. One employee at ABC stated that cars do not hold value like real estate and depreciate rapidly, with commercial vehicles carrying even greater risk. This was one of the main reasons the bank suspended personal auto credit for over two years. A win-win model is crucial for collaboration between manufacturers and financial institutions. CNHTC, an insurance company, and a commercial bank have jointly developed a consumer credit program, setting a national precedent. This model involves shared participation, clear responsibilities, and limited risk, creating a new approach to credit. Insurance involvement has motivated dealers to implement credit programs more effectively. Vice President Wei Zhihai of CNHTC said: “Collaborating with banks and insurers on consumer credit is a bold attempt at a new model. It represents a joint effort to open markets and achieve mutual benefits.” Ni Guixiang added: “Very few manufacturers currently offer consumer credit for commercial vehicles, especially heavy-duty ones. CNHTC’s entry into this field is a breakthrough. High credit risk is why banks are cautious. However, CNHTC’s ability to manage bad debt and reduce risk, along with sufficient funding after its Hong Kong listing, makes it a strong player in this space.” Despite challenges, the future of commercial vehicle credit holds promise. Xu Xiaohua, General Manager of the China CITIC Bank Auto Finance Center, once noted that if 30% of car buyers opt for financing, the domestic auto credit demand could reach 300 billion yuan by 2010. With nearly 10 million cars sold annually, this represents a huge opportunity. Business-operated commercial vehicles are used more frequently than passenger cars, and loan renewals occur faster. Commercial vehicle users tend to show stronger brand loyalty and influence. Once they use a vehicle for business, they often continue with the same brand and choose familiar financial institutions. This can lead to higher returns than with passenger cars. With proper coordination between manufacturers, dealers, and financial institutions, the credit landscape will gradually improve. The rise of professional auto finance companies has introduced new players into the automotive credit sector. While GM pioneered passenger car finance in China, companies like Volkswagen and Toyota followed. Volvo Car Finance (China) became the first specialized firm focusing on commercial vehicles. Domestic commercial vehicle manufacturers are increasingly recognizing the importance of consumer credit. Dongfeng Motor uses financial companies to offer truck credit, establishing a three-party system involving headquarters, dealers, and its own finance arm. Sinotruk primarily collaborates with banks, signing agreements to enable dealer-backed credit. In today’s growing and specialized auto credit market, developing a safe and innovative commercial vehicle credit model is key. Balancing interests among banks, manufacturers, and insurers, while leveraging each party’s strengths, will be critical to achieving long-term success. This requires reducing costs, improving service quality, and enhancing overall customer experience. “Maximizing risk control while promoting gradual development is an effective way to drive mutual growth between commercial vehicle credit and marketing,” said a senior executive.

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