Gasgoo.com (Shanghai July 1) - Due to various macroeconomic conditions, banks in China have been tightening up their loans earmarked for automobile dealerships' financing services. As a result, dealerships' approval standards for applicants looking to secure automobile loans have gotten much stricter
A Beijing News report appearing today cites a statement made by automobile financing official at an Audi 4S dealership, who explains the situation at his dealership. Audi currently cooperates with several banks and financing companies to supply loans for customers. Beginning in May, some of its partnering banks and financing companies stopped supplying funds, delaying over ten new car orders. Furthermore, those banks have begun administering limits on how many funds they will supply in the future. "As banks limit funds, 4S dealerships have to follow them in enacting limitations," the official said.
The tightening of funds coming from banks and other outlets has forced dealerships to implement stricter standards for auto financing applicants. In the past, dealerships only required applicants to supply their identification information and any previous automobiles to secure credit. Now, information regarding floating assets and permanent address is also required. Private companies need to also prove that their operations are financially stable. Banks are also sending their own representatives to work alongside dealerships' financing staff to verify the information supplied by applicants.
Although some other dealerships have not reported suffering any problems in obtaining financing, analysts expect the issue to become very noticeable later this month, when many dealerships' partnerships with banks and other financing enterprises will have to be renewed and renegotiated.
