The "Rules" of the "Administrative Measures" issued from the automotive financial market

On November 12, the China Banking Regulatory Commission promulgated the "Implementation Rules for the Administrative Measures for Auto Finance Companies", which indicates that the door of the Chinese auto financial service market is officially open to the outside world, and China's auto consumer credit market will develop toward standardization. At 9 o'clock that night, GM submitted the financial service permit application report first, and the multinational auto giants also responded.

On November 12, when the CBRC promulgated the "Implementation Rules for the Administration of Auto Finance Companies" (hereinafter referred to as the "Detailed Rules"), General Motors Financial Services and the Chinese partner, Shanghai Automotive Group Finance Co., Ltd. formally submitted the application report. Became the first foreign auto credit company to formally apply for an auto credit permit in China, GM also said that once it has obtained a financial service permit, it will start auto credit business in China in the first place.

"The "Detailed Rules" was issued, indicating that the door of the Chinese auto financial service market has officially opened to the outside world." On November 13, Xu Wensheng was told by a friend's phone and said after reading the full "Detailed Rules" with the fastest speed.

As the chief person in charge of the Beijing Asian Games Village Auto Transaction Credit Service Department, Xu has been watching the development and changes in the domestic auto credit market structure. In his view, "If the "Administrative Measures for Auto Finance Companies" (hereinafter referred to as the "Measures") set forth on October 3 stipulates the market access system, the "Detailed Rules" answers questions on who is qualified to do and how to do it. ."

The industry's explanation is that the "Detailed Rules" detailed the "Measures", which means that the establishment of auto finance companies has entered the actual operation stage. At the same time, the China Banking Regulatory Commission issued an application to accept the establishment of an automotive finance company.

According to Gao Chuanjie, director of the non-banking financial institution supervision department of the China Banking Regulatory Commission, the newly promulgated "Detailed Rules" consisted of five chapters and fifty-eight articles, which set specific requirements for institutional, personnel, and business market access, and regulated financial supervision. Answered a question of “What kind of person can enter, how to enter, how to manage, how to retreat”.

According to China’s commitment to China’s accession to the WTO, there should be no restrictions on the market access of auto finance companies. In other words, all investors who wish to set up an auto financing company will have market access qualification as long as they meet the conditions stipulated in the Measures and the Detailed Rules. During the operation of the company, the supervision department will supervise the auto finance companies in accordance with the law. If problems are found, they will require improvement. Companies with serious risks will be withdrawn from the market according to law. All auto finance companies operate according to law and compete fairly.

Gao Chuanjie said: "The "Rules" are only aimed at corporate bodies. The management methods for individuals and dealers are still being worked out. Consumers are required to comply with existing regulations in loan financing for auto finance companies. There have been zero interest rates in foreign countries. Loan car purchases are currently unrealistic in China."

How big is the impact

The rules of the game have been delineated. The rest is just a matter of time. After the introduction of new competitors in the car loan market, the exclusive monopoly position of commercial banks will soon be broken, and domestic credit institutions will undoubtedly face the choice of being eaten by wolves or dancing with wolves.

Xu Wensheng believes that after the establishment of the auto finance company, if it borrows funds from domestic banks, domestic banks still have protection, and fear that they will all borrow foreign funds. The real problem faced by domestic banks is that they do not have relevant industry experience. For instance, bad credits that occurred during this period can be regarded as the “tuition fees” paid by banks, and half of the responsibilities should be borne by the banking industry.

Su Hui, general manager of the Beijing Asian Games Village Auto Trading Market, said that after the intervention of foreign auto giants, it has advantages over domestic banks: The former is a professional financial company with mature experience. Even if China is currently unable to achieve zero interest rate due to the restrictions of China's policies, they must have more favorable means and conditions to compete with the banking industry, such as providing a number of after-sales services, such as by reducing the relevant intermediate fees such as insurance premiums and legal fees. Bring real benefits to consumers, thus expanding market share with credit consumption.

Jia Xinguang, chief analyst of China Automotive Industry Consulting Development Corporation, believes that the emergence of foreign auto finance companies will greatly impact the existing auto credit market. Although auto finance companies will use financing to the Chinese banks for interbank lending, and cannot carry out other businesses such as discounting, mortgages, insurance, mortgages, leasing, etc., and are subject to conditions such as the inability to set up branches, they will try their best That is, "it is not necessary to enter, once you enter, you must have a lot to accomplish." Auto finance is not simply a car consumer credit, not a simple installment payment, and its object of inclusion is the value chain of the entire automobile industry. The ultimate model of development is "one handed support." "Three companies" - manufacturing, circulation, and consumption, thus forming a closed loop of the industrial chain to ensure its strong position.

From this point of view, waiting for the opportunity to cross the threshold, only multinational auto giants "went the first step in the long march," and even more fierce competition is still behind.

The forerunners will be interviewed at the end of next year. Many people in the industry have stated that according to the timetable for establishment and opening in accordance with the "Detailed Rules," auto finance companies are most likely to open business by the end of next year.

The "Rules" stipulates that the CBRC will make a written decision on whether to approve the preparation within six months after accepting the application for establishment. After the company intends to set up the preparatory work for the establishment of the company, it will submit an application for opening a business to the local banking supervision bureau. The China Banking Regulatory Commission will, within 3 months after accepting the application for opening a business, make a written decision whether to approve the opening of the business. If the proposed auto finance company needs to apply for an extension of the preparatory period at the preparatory stage, the maximum period is 3 months. Therefore, the pioneers of auto finance companies are very likely to end the next year.

Then, how will auto finance companies conduct business and what are their development directions?

Dr. Wang Zaixiang, the first auto finance doctor in the country, said in an interview with reporters that unlike commercial banks, auto financial institutions are usually affiliated with larger automobile industry groups, and their primary market position is to promote the sales of automobiles and related products. Although there is no provision in the "Rules" that an auto financial institution can only make sales loans for one brand of car, given the limited financial resources of early-stage auto financial institutions entering the Chinese market, and the recognition of auto financial companies by auto manufacturers. The problem, therefore, is that an automotive finance company is unlikely to provide consumer loans for other brands of vehicles.

This is also true, and GM clearly stated that after the establishment of a joint-venture auto financial service company with SAIC Finance, the first benefit would be the purchase of all of the Shanghai-GM’s joint venture car consumers. The auto giants such as Ford Motor Co., Volkswagen Motors, and Toyota almost all determined that the auto financial service business only provides automobile consumer loan services for their own brands in the early days of market opening.

“At present, there are more than 100 automobile manufacturers in China. According to the market access conditions of auto finance companies, there may be more than 10 to 20 automotive finance companies.” Industry insiders believe that in the future domestic small car companies may be bundled. Together, look for a large automotive finance company to form an agent alliance.

Leveraging the automotive consumer market

The CBRC has high hopes for the development prospects of auto finance companies.

A spokesperson for the China Banking Regulatory Commission disclosed in an interview with reporters that about 20 investors have already expressed their intentions to the China Banking Regulatory Commission, but he also declined to disclose more information.

In fact, multinational auto giants that have waited for many years have responded differently when financial companies open their doors. At 9 pm on November 12, GM officially announced that it had filed an application for a license for auto financial services in China and became the first foreign auto credit company to formally apply for the business in China.

Ford Motor Co., Ltd. Public Relations Department Miss Zhu said that Ford has been waiting for this for 7 years, is currently actively preparing for the application, Ford will be "when the time is ripe to open the business progress to the media."

The Public Relations Department of Volkswagen (China) Investment Co., Ltd. wrote in an interview letter to the reporter: “The first thing we need to do now is to submit an application to the CBRC. According to the regulations, the approval process must go through a series of procedures. It takes about one year for the formalities, and we also hope to get the approval of the preparation of the China Banking Regulatory Commission as soon as possible so that we can provide financial services to our Chinese customers in support of China, as we have done in other markets around the world. The development of the automotive market."

Toyota said that the details of the newly promulgated relevant policies are being researched and the specific approach has not yet been determined.

These positive signals have intensified the confidence of the China Banking Regulatory Commission. They believe that the upcoming auto finance companies face a fast-growing and huge potential auto consumer credit market. Since 1998, China's auto consumption loan business has seen sustained and rapid development. In spite of this, relative to the speed of development of the automotive consumer market, the scale of existing loans is far from meeting the needs. Vehicles sold through loans account for less than 20% of the total sales of new vehicles, which is far from 70% of foreign sales. Therefore, at the beginning of the birth of the automotive finance company, it has acquired a historic opportunity to leverage the development of the automotive consumer market.

In addition, automotive financial services are closely integrated with the manufacturing, sales and consumption processes of automobiles. Auto finance companies have professional advantages in the development of automotive financial products and risk control. The history of the development of foreign auto finance industry proves that as long as auto finance companies operate in accordance with the law and focus on exerting their own advantages, there will be more and more broad market development prospects.

In fact, at home, the rapid growth of the auto consumer credit market has become a new profit growth point for auto makers, banks, and auto dealers. More optimistic estimates suggest that China’s personal auto loans this year are expected to reach 200 billion yuan, which is the second largest personal credit market second only to personal mortgages, and this figure is based on a car loan rate of only 20% of the number of car buyers. On the basis of this, if the 70% global average car loan rate is reached, the profit space and development prospects can be imagined.

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