Lending Rate Cut: Good for Auto Industry 2
2008-09-22 Source：english.chinabuses.com
Summarize：Some small-sized automakers' capital pressure will be relieved as they are the first to be affected by tight monetary policy, declining auto consumption demands, soaring stocks and prices of raw mate ...
Some small-sized automakers' capital pressure will be relieved as they are the first to be affected by tight monetary policy, declining auto consumption demands, soaring stocks and prices of raw materials.
"This is a good news for us, we can only depend on bank loans as we can't get financing like large automakers," said an unnamed source at a small-sized automaker in Zhejiang province. "Loan rate reduction will lower Chang'an Auto's financing expenses," said Changan's securities representative.
Additionally, the reduction will also benefit auto dealers. Currently, auto dealers are being challenged by difficult loan issuance and high loan rate. They are also bearing high pressures from fund settlement and stocks, according to Lang Xuehong, an expert in auto market research at research firm Sinotrust.
China's vehicle sales posted the first decline of this year in August when domestic automakers sold a combined 629,000 vehicles, down 6.34 percent year on year, according to statistics from the China Association of Automobile Manufacturers.
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