BEIJING, Feb 4 - Automakers operating in China are stretching consumer car-loan repayment periods as a sales stimulus, with some plans now extending as far as eight years. The move is part of a wave of extended, low-interest financing options aimed at attracting buyers in the world's largest auto market, where demand has cooled.
On Tuesday, a Nissan joint venture with Dongfeng began offering an eight-year financing option that requires no initial down payment. Promotional material for the plan highlighted that buyers of the Sylphy Classic would face a daily repayment as low as 27 yuan ($3.89), equating roughly to the price of a coffee per day.
That eight-year proposal joins offerings from at least 10 other car brands that have rolled out longer-term financing in recent days, including Xpeng, Xiaomi and Geely. The market shift follows earlier moves by an industry leader: Tesla introduced a seven-year plan in China in January, prompting competitors to announce similar seven-year packages that typically require a down payment. Incentives tied to Tesla's Model 3 and Model Y purchases through the end of February also include an extension of prior plans of up to five years with no down payment.
Historically, car loans in China were capped at five-year terms. Regulators loosened that framework last year, allowing consumer loan maturities of up to seven years as part of efforts to shore up weak consumption. The entry of eight-year offers sits alongside that regulatory change and reflects more aggressive lender or manufacturer-led tactics to lower monthly payments and broaden affordability.
The proliferation of extended-term financing arrives as China’s auto sector appears set for a difficult year. Sales are tracking toward the weakest performance since 2020, the year the COVID-19 pandemic began, a trend compounded by the government cutting back subsidies for trade-ins of budget vehicles that constitute the bulk of new-car purchases.
Dongfeng and Nissan did not immediately respond to a request for comment on how the eight-year plan aligns with current regulatory limits on consumer loans. ($1 = 6.9361 Chinese yuan renminbi)