Automotive finance companies and then 5-year break

In August 2004 from China’s former auto commerce companies – GMAC-SAIC Automotive Finance Company since the establishment of China’s auto commerce companies possess entered the fifth year.

Up to now, China’s total foreign-owned or-controlled motor vehicle finance companies 9. Volkswagen, Toyota, Fiat, Ford, PSA Peugeot Citroen, Daimler – Chrysler, Volvo, Nissan, etc. China’s automobile test water financial markets. First established by the local enterprises Chery Automobile Emblem Bank Financial Inc. also received the approval of China Banking Regulatory Commission, the forthcoming opening of the year.

By the end of December 2007, had currently opened eight auto investment businesses amounted to 28.498 billion yuan of assets, when a total of 16.47 million yuan earnings, non-performing lend rate of 0.26 per hundred, commerce profitability for the first time.

Car investment financing form has been nearly completely reliant on the past, bank borrowings, into a expert enterprise vehicle investment businesses live at about 40% of the total. More significantly, several automotive investment businesses are endeavouring to discover the enterprise form in line with nationwide situation and goods, vehicle lend enterprise getting better.

Was the most profitable financial services In fact, the auto finance business was the most profitable auto industry a “big cake.” U.S. auto finance company car loan business has been more than car manufacturers themselves, to become the most important car manufacturers source of profits.

At present, 41 nations in the world 38.2% of the users is the lend to purchase a vehicle, particularly in the vehicle progressively meager earnings today, automobile investment businesses to supply earnings to total earnings Automotive Group 1 / 3.

GMAC-SAIC Automotive Finance Company Christian Weidemann said: “By 2025, China’s auto market will reach 15 million, automotive financial services industry will also have the market capacity of 525 billion yuan.” In order to determine the present situation, this process may will be faster. Automotive financial market is another attraction: according to international practice, even if the whole production profits fell 3% to 5%, the auto finance business to maintain profit margins around 30%.

Industry experts said that if the car can keep up with consumer credit, the promotion of sales will be “doubled” in the future, the domestic automobile market in consumer credit quite large. At present, the popular international automotive manufacturer to set up financial companies, the joint dealer, to provide customers with car sales and after-sale service. Abroad, automobile consumption loans 70-80% provided by the auto finance companies.

Statistics show that auto finance companies generally profitable bottom line is the ratio of loans and sales of more than than 25%, but now, the best domestic car finance companies are difficult to achieve 15%. At present, all foreign-car shortage of funds of financial institutions hundreds of billions of dollars, with annual sales of the car only 5% of the following.

As a outcome of rising interest rates, the tensioning of bank loans, car commerce companies towards gradually elevate the right vocabulary, “In the beyond, mainly via bank loans, auto commerce companies are already increasing again moment, ranging approximately 40%.” State Council Development Research Center Ministry of Economic Affairs industry scientist remarked ordinary money.

, Chairman of Volkswagen Finance Corporation has said: “China is about 10% of vehicle buy loans. We wish that in 10 years this number will boost to 40% ~ 50%.” President of Toyota Motor Finance Corporation, said Gu Ping泽嘉will try to emblem the Beijing locality Toyota vehicle lend rate from the present 2% to 10%. SAIC trials

In China, SAIC Automotive Finance earliest touches as well as a profit former, none doubt become the industry sample.

GMAC-SAIC Automotive Finance Company, notified reporters the applicable individual in ascribe, the business set up to accomplish a earnings after two years. As of 2007, the business borrowing assets in surplus of 12.0 billion, expansion to 146 towns nationwide, covering all emblems Shanghai GM, when the cumulative snare earnings of 85.21 million yuan. Retail borrowing enterprise increased 125 per hundred year-on-year, functioning more than 1.3 billion U.S. dollars of assets, the retail lend agreements marked by more than 79,000 copies.

At the same time, GMAC-SAIC Automotive Finance Company’s credit asset securitization has also been significant progress in the project, SAIC of GMAC-SAIC Automotive Finance Company has also received equity investment returns.

In 2008, GMAC-SAIC Automotive Finance Company of the foreign shareholders of General Motors quagmire deep financial facilities corporate, faced with increasing rates of credit delinquency, the number of vehicles towards retrieve increasingly complications, December 24, 2008, the U.S. Federal Reserve Board towards the financial facilities corporate General Motors, a Christmas gift, the consent of the lending institutions, the automotive industry for the bank retention corporate within transition.

SAIC will take economic businesses to purchase foreign vehicles contain portions of economic companies? “China has not a deep comprehending of economic businesses, the capital may be adept to purchase it, but it is not a good time to need to believe clearly.” Xinhua Motors vice leader of trading answers Xuehong Lang notified the “al investors.”

Can see that Shanghai Automotive finance companies are also stepping up the development of automotive financial services, a thorough transformation of the traditional model of buyer’s credit, the introduction of model-based motorcycle dealer financing buyer’s credit business and personal car credit business, in September 2007, Rongwei Brand in Beijing on the first production line, started off auto finance business, after which the general public, Ssangyong brand car also has financial services on-line for the whole SAIC products to play an effective role in the financial support.

Than the bank has the promise to Automotive Finance Corporation has the benefit of being adhered to the automobile enterprise assemblies, the enterprise assemblies and very resolute the natural foremost of the automotive investment businesses and financial banks, contrasted with the exceptional benefits in three areas: on the deeper comprehending of emblem vehicles; circulation of the emblem deepness comprehending of enterprise and productive control; disposal to facilitate the recycling of vehicles.

This natural advantage doomed automobile finance companies in the Chinese market a huge room for future development.

Car through a bank loan, they generally need to provide accounts of the purchaser of a motor vehicle, real estate information card at the same time usually needed to do to housing or mortgage securities, bonds and pay certain costs related procedures.

However, as long as the car auto finance companies have steady jobs and homes, a stable source of income and repayment ability, good personal credit, you can apply for car loans, the lender’s account of the location, the availability of housing, etc. There is no limit. But equally obvious shortcomings, car finance loan car loan interest rates higher than banks.

“The existing model, consumers need to automobile dealers to finance car loans.” A dealer said that if the dealer is not due or intentionally concealed information of consumers, resulting in damage to motor vehicle finance companies, which may be loss of marketing rights.

Abroad, automotive investment businesses are only lending its emblem of engine vehicles. GM, Ford Automotive Finance Corporation through the support, in order that buyers can be traded second-hand vehicle for a new car; the second vehicle will be adept to relish a more favorable rate. The commerce accepts as factual that this form can cultivate the commitment of buyers will help to enhance the general sales.

On the complete automobile industry chain downstream, cap the complete plant, logistics companies, automobile commerce companies, dealers, used car sales, automobile and else consumer links. OEMs attractive brands and products, the automotive financial facilities play a decisive role. But the banks do not possess the element. “Specialized automobile commerce a tall degree of risk, should advocate a many businesswoman contextual of the car commerce corporate car commerce business.” Chongqing Automotive Business Association, remarked the Secretary-General Chou.

From an industry towards predict the future direction of car finance: a few years afterwards, the car manufacturers shall be able towards establish their own financial platform car, car credit systems enormously simplified. Automobile commerce corporate shall possess a finalise subversion within China for numerous decades of history the notion of old-fashioned bank loans towards buy cars, car buyers shall enjoy the unprecedented low interest rate loans and else facilities, and shall gradually replace the bank loans car loans has become the mainstream distance of the future. Banks shall be many within financing, fee and village, and so the credit card corporation, and businesswoman auto commerce companies form a complementary business.

Policy as a fulcrum

In accordance with the automobile industry within 2009 towards herald the revitalization of the intending itinerary, shall be introduced within April, “the promotion of car policies and indices of financial development,” but as of press moment, this policy has been introduced.

At present, the household auto investment businesses financing charges are too high, slender scope of enterprise, decrease of communal borrowing scheme and other difficulties, the future examines ahead to “measures” to have more improvements, and then leveraging leverage automotive buyer borrowing, expanded buyer auto market demand. Lang Xuehong said that the household auto investment businesses due to principle limits, somewhat high financing charges, in such situation, the enterprise has a certain degree of difficulty.

Under the new “motor vehicle finance company management”, in addition to the use of company capital, the auto finance companies can only borrow from banks or, where the absorption of outside shareholders and the Group wholly-owned subsidiary in China and three on the territory of the shareholders (including ) more than time deposits. Once the larger business, the auto finance companies can only competitors to the same bank borrowings.

If the borrower to the bank, 1-year lending rate of more than 5% at least, the interest rate is clearly too high; such as through the transfer and sale of automobile loan receivables business to raise capital, as a result of automobile credit risk itself is currently operational, this financing costs in the feasibility and the existence of a larger problem.

At present, the three foremost vehicle investment businesses encompass individual buyer borrowings, wholesale borrowings (specifically the procurement of vehicles on trader borrowings, is distinct from the general business loans) and investment leases. However, engine protection, mortgages and other services not inside the scope of the operation.

Lang Xuehong within it, restrictions onto corporation scope, corporation climb shall not be able towards do a lot of businesses shall possess an impact onto profitability. Automobile commerce company’s corporation mainly specialised within the latest consumer credit risk, making auto commerce company’s risk management processes a single, resulting within car commerce companies doing corporation within a princely increase within credit when the threshold had towards limit its selling efforts.

Xuehong Lang pointed out that automobile dealers in 2003 in order to help consumers get access to customers and even consumer credit, led to an increase of non-performing loans, banks were forced to quit automobile credit. In fact, malicious deception is only a small number of loans for the individual consumer as a result of the economic situation repayment difficulties, need to examine the vehicle in time to recover, the largest auto finance company to reduce the extent of losses method. In fact, the most important thing is, when lending, strengthen the assessment of consumer’s repayment ability.

Car finance company is mainly relying on its own collection, recording, collation and analysis of customer’s credit file, credit investigation and rating will not be able to improve the efficiency of risk prevention, but also virtually an increase of costs, increased operational risks, to some extent constraints or even the auto finance companies throughout the automotive market.