Chery launches auto finance firm in Shanghai

Shanghai, April 22 (Gasgoo.com) China's largest domestic carmaker Chery Auto launched an auto finance company into service in Shanghai yesterday, a company jointly formed with Huishang Bank in Chery's home province of Anhui in eastern China, xinhuanet.com reported.

The joint venture, named Chery Huiyin Auto Finance Co. Ltd., is the 10th auto finance firm in China but the first domestic one formed by two Chinese companies. Chery Auto began to prepare for the launch of this finance company in June 2008 after getting the green light from the China Banking Regulatory Commission.

According to Chery, its auto finance company has a registered capital of 500 million yuan ($73.5 million), of which Chery holds a controlling stake of 80% while Huishang has the other 20%. Chery said the finance company would provide loans to both dealers and auto buyers.

The business of Chery Huiyin is expected to cover Chery Auto's dealerships in mainland China within two months, and the loan services for car buyers will start by the end of this year in ten Chinese cities at first, said the auto finance company's general manager, who added that the company will begin to make profits in the second year of its operation.  
 
China's first auto finance company opened in August 2004 when GM Acceptance Corp. and SAIC Finance Corp. set up a joint auto finance company. By the end of 2008, nine overseas automakers in China, including Volkswagen, Toyota, Ford, had formed auto finance companies in the country.