Automakers sold 12 billion yuan ($1.8 billion) of debt, compared with 3.5 billion yuan a year earlier, data compiled by Bloomberg show.

China Changan Automobile Group Co. issued 1.5 billion yuan of notes on March 30. Beijing Automotive Group Co. and Chery Automobile Co. also issued bonds to finance expansion even as first-quarter auto sales grew at the slowest pace in two years.

The offerings are more than three times the 3.5 billion yuan worth of new stock sold on the mainland this year as stock in Chinese car companies such as BYD Co. and Geely Automobile Holdings Ltd. declined.

"Banks are tightening up loans and it costs more to issue additional shares on the stock market than selling bonds," said Harry Chen, an analyst in Shenzhen with Guotai Junan Securities Co., China's second-largest securities brokerage.

Beijing Auto, Chery
Changan, which has joint ventures with Ford Motor Co. and PSA Peugeot Citroen, seeks to develop its own marque. The Chongqing-based automaker said last October that it plans to invest 11.5 billion yuan in a project in Beijing to produce 500,000 vehicles and 500,000 engines a year.

Beijing Auto, a partner of Hyundai Motor Co., said on April 21 that it plans to sell 400 million yuan of bonds in the second quarter, after issuing a similar amount of five-year bonds on Jan. 28.

The carmaker plans to establish its own medium to high-end passenger car brand, President Wang Dazong said at the Shanghai auto show last week. The company bought technology from Saab Automobile AB in 2009 to boost development of its own cars and purchased production facilities from Sweden's WEIGL Transmission Plant AB in February.

Chinese automakers need to develop their access to the bond market as different financing options offer cost savings for the company, Wang said in Shanghai on April 20. "We need to increase our sophistication," he said.

Chery, China's biggest closely-held carmaker, sold 1.8 billion yuan of three-year bonds on Jan. 25. This is in addition to the 43 billion yuan credit line the Anhui-based carmaker also secured from China Development Bank Corp. in April to support new models.

Chery, maker of the QQ mini car, unveiled three new sedan models at this week's Shanghai auto show.

BYD, which is 10 percent owned by billionaire investor Warren Buffett's Berkshire Hathaway Inc., announced plans on April 20 to issue bonds worth 1 billion yuan. The debt issuance will help expand its battery and handset component businesses and pay off previous bank loans, said John Lee, head of investor relations at BYD.

Shares in BYD, which plans to bring its E6 pure electric cars to the U.S. this year, have fallen by half since September as sales of its own-brand cars fell for seven months through March.

The Shenzhen-based automaker said last month that its fourth-quarter profit fell 94 percent to 90 million yuan. BYD raised funds through a 15 billion yuan loan in 2009, according to Bloomberg.