China the second-biggest market for Volkswagen Finance unit: executive

China became the second-most important market among the 49 countries and regions covered by Volkswagen Finance in 2013, a senior executive said Wednesday in Beijing.

The auto finance unit is under Volkswagen Group AG, the world's third-largest automotive company by output.

Joern Kurzrock, CEO of Volkswagen Finance China, said the auto finance penetration rate nearly doubled in China from 2010 to 2014 and this trend is expected to continue into the future.

"Now, 10 percent of Volkswagen units sold in China are sold via auto finance. In the next three to five years, the finance penetration rate is expected to rise to 40 to 50 percent," Kurzrock told a press conference held in Beijing Wednesday.

In the first six months of 2014, Volkswagen Finance China recorded 183,534 new retail loan contracts.

In 2013, the number of contracts totaled 230,000, up 52 percent from 150,000 in 2012.

The 2013 figure is about eight times the 2009 figure, according to Reinhard Fleger, regional chief representative of Volkswagen Financial Services.

Volkswagen Financial Services lends retail loans to consumers purchasing products from the 12 brands owned by the Volkswagen Group AG, including high-end brands Audi and Bentley and commercial vehicle brands MAN.

At the ongoing Chengdu Auto Show, sales representatives from a number of brands, including those with Anhui-based domestic carmaker JAC Motors and Swedish brand Volvo, now a subsidiary of Zhejiang Geely Holding Group, all confirmed to the Global Times that their companies have rolled out auto finance policies designed for the regional market.

A total of 17 auto finance providers formed an auto finance professional committee under the China Banking Association in Beijing on June 10, 2014 to beef up industry-wide self-discipline.

Auto finance units of international brands such as Buick and Toyota and domestic brands such as Chery are among the committee members.

However, some Chinese consumers are still holding back from using auto finance.

"The fees or interest rates are a deterrent. Many of my friends simply turned to their relatives," a man, who only gave his surname as Zhu, told the Global Times on Wednesday, referring to the family financing channels that many Chinese use.

China is currently the most important market for Volkswagen Group AG. Car sales in the Chinese mainland and Hong Kong markets of Volkswagen Group AG exceeded 3 million units for the first time in 2013, data from the China Association of Automobile Manufacturers showed.