Chinese car manufacturers explore cross-border leasing schemes

As Chinese car manufacturers face increasing trade hurdles in international markets—ranging from high import tariffs to strict local content requirements—the industry is beginning to move away from the traditional “one-time sale” model.

In its place, a new strategy involving cross-border leasing is gaining popularity as a more practical and sustainable pathway for global expansion, according to reports from Carnewschina. Recent data from the China Passenger Car Association (CPCA) shows that China exported 769,000 vehicles in April, an 80.7 per cent increase compared to the same period last year. During the first four months of 2024, total exports reached 3.127 million units, with New Energy Vehicles (NEVs) accounting for nearly half of that figure.

Unlike traditional exports that immediately transfer ownership to the buyer, cross-border leasing—often structured as financial leasing—allows companies to retain control over the assets. Under this scheme, exporters can reap financial benefits, such as VAT refunds domestically, thereby improving cash flow. Furthermore, companies can secure long-term revenue by binding customers through long-term service contracts, including maintenance and insurance, creating a sustainable revenue stream rather than a single transaction.

This model is described as “asset-light, operation-heavy.” It is considered “light” because companies do not need to make massive investments in building factories or purchasing land abroad. However, it is