Chery gets approval to offer auto financing service

SHANGHAI, June 23 (Reuters) - China's fourth-largest car maker, Chery Automobile, has obtained regulatory approval to set up a domestic joint venture auto financing arm, capitalised at 500 million yuan ($73 million), a Chery executive said on Monday.

Chery will hold 80 percent of the venture, while Huishang Bank, located in Chery's home base in eastern Anhui province, will hold the balance, Chery spokesman Jin Yibo told Reuters.

The firm, expected to begin operations late this year or early 2009, is the first auto financing firm funded by a domestic bank, he added.

Major industry giants, such as General Motors Corp and Volkswagen AG, have been offering auto financing services for years in China to help bolster growth in the world's second-largest auto market. The existing nine auto financing firms are all funded by foreign automakers' financing units. ($1=6.87 yuan)