Gasgoo.com (Shanghai June 16) - Great Wall released an announcement that its application for a business license for its financing company has been officially approved by Tianjin Binhai New Area's Administration for Industry and Commerce, the National Business Daily reported today. The new company, known as the Tianjin Great Wall Binhai Banking Automobile Finance Company, possesses registered capital of 550 million RMB ($89.46m). According to a Great Wall representative, the new company is a joint venture between Great Wall, which owns a 90 percent stake, and the Tianjin Binhai Rural Commercial Bank, which holds the remaining stake.
A Great Wall dealership representative elaborated on the agreement. The dealership had already received news of the new company's establishment, but is still unsure which services it will offer and what direction it will develop in, as well as how it will work together with other internal departments and dealerships. The representative added that the majority of Great Wall's financial services are done in cooperation with China Construction Bank, whose loan application policies require over a week and delay processing for the manufacturer. In several cities the financial penetration rate for Great Wall's services is between 15 and 20 percent, lagging far behind multinationals such as BMW and Mercedes-Benz, the former of which boasted a financial penetration rate of 33 percent last year.
"Now that Great Wall has established an independent financing company, loan application times will hopefully decrease," the dealership representative stated. "This may help us attract even more customers to use our financing services as well as help as boost our sales volumes."
Great Wall has recently been under a lot of pressure from new entries to the Chinese SUV market as well as its decision to pull back on sedan sales, leading its overall sales growth to drop. According to official statistics the manufacturer sold 189,500 SUVs, 54,500 sedans and 54,900 pickup trucks over the five-month period from January to May. While the SUV sales figure was 22.3 percent higher from last year to this year, sedan and pickup truck sales fell 45.61 percent and 1.74 percent, respectively. The manufacturer sold a total of 298,900 sedans last month, down 3.8 percent from the amount it sold in May of 2013.
