Dong Xingrong,Chen Li, the Treasury Chinese "feeds"

Introduction.The subject and the provision of financial services on the funding chain value chain in the automobile industry constitutes the automobile financial service system,With the automobile manufacturers, distributors, suppliers, together constitute the ecological circle of automobile finance, namely the automobile finance. From the automobile financial mode, such as iron and steel, energy and other industries financial model and so.As everyone knows, the automobile industry is a typical capital intensive industries. From the car throughout the production process, features of each link, purchasing, manufacturing, sales, R & D is capital intensive. From the automobile industry chain, manufacturers, suppliers, dealers, auto finance, commercial banks, insurance companies and other forms of complex"N+1+N"The mode of the industry chain, the customer demand as the origin, from research and development, procurement, manufacturing, sales to repair, maintenance, constitute a value chain of automobile industry.The subject and the provision of financial services on the funding chain value chain in the automobile industry constitutes the automobile financial service system, is an important part of ecological circle of automobile finance,And vehicle manufacturers, dealers, suppliers together to form a large Automotive Finance (namely the automobile financial ecological circle). The automobile finance service system mainly include commercial banks, automobile financial company, group finance company, as well as providing insurance services and leasing services, insurance companies and car rental companies.The connotation of the auto finance industry with the expansion of the scope of financial business of automobile is unceasingly rich. In the international automobile market, the automobile financial industry not only in the whole automobile industry chain play an important role, perfect automobile financial system is one of the national automobile industry maturity. Survey data show, auto finance companies profit contribution rate of the world famous automobile manufacturers, the average account for its parent company profit30%~50%.

 

Automobile finance

 

   In order to better understand the automobile finance, we first from the general sense of the automobile finance.The automobile finance is the financing in the production, circulation, vehicle purchase and consumption in finance activities, mainly including fund raising, use of credit, mortgage discount, issuance and trading of securities, and insurance and investment activities, it is an inevitable result of the automotive industry and the financial industry mutual penetration.

 

A concept:The automobile finance reincarnation

 

   The automobile finance originated in20Century20In the early 1990s, automobile sales instalments to provide consumers with the automakers, but installment manufacturer is occupied the manufacturer's production, operation of funds, in order to solve this problem, the automobile manufacturers began to build their own financial company, which began the automobile financial history.

 

   The world's first organization of automobile financial service is1919GM bill years America GM accepting company set up, due to the special organization of automobile financial service, separation of automobile manufacturing and sales aspects of funds, to promote sales growth. Since then, many foreign well-known automobile manufacturers have started to set up financial companies to provide financing to dealers and consumers, as well as commercial bank intervention, gradually formed the automobile financial service system.

 

   China's automobile financial services started late, can be said to have been to1998Years10The people's Bank issued the "automobile Chinese monthly financial management regulations", China auto finance market is officially launched.2004Years of the promulgation of the "development policy" and the "auto industry auto loan management approach", which greatly promoted the development of the automobile financial service.

 

   The automobile finance is also with the development of automobile industry and the continuous development, the current mainstream providers of the automobile financial service includes: auto finance companies, commercial banks, automobile leasing companies, insurance companies, third party service providers. Compared with foreign countries, the domestic auto finance providers mainly commercial banks (as shown in Fig.1).

Fig.1  A comparison of the financial market of automobile body

 

A circle:The automobile financial ecological circle

 

   With the rapid development of China's automobile industry, the growing importance of the auto finance industry, automobile industry in the increasingly prominent. Automobile manufacturers (OEMs) is the core enterprise of supply chain in automobile industry, but also the core of ecological circle in the automotive finance. At present, the domestic each big automobile group have established the automobile financial company or relying on financial companies vied for the automobile finance market, the industry chain will be extended to the financial sector. The automobile finance is also an important piece of the Financial Services Board of commercial bank, many commercial banks have set up special automobile financial sector, and the introduction of the corresponding products. But the insurance company is the important part of the ecosystem of the automobile finance. The automobile financial ecological circle to automakers, dealers, auto finance companies, commercial banks, insurance companies, automobile after sale service market, logistics service providers (such as the main body of the automobile finance) has been gradually formed.

 

   According to the characteristics of the main source of the industrial chain, automobile manufacturers money demand is around the floating capital turnover and plant construction, new or upgrade the production line, the R & D investment and technological transformation, raw materials and spare parts procurement, financial needs for the management of funds settlement, cash (account management and capital accumulation, the settlement and sale of foreign exchange, etc.) financial management,IPO,PEEtc.. Correspondingly, the needs of financial services for fixed asset financing, cash management, supply chain finance, corporate finance, trust, insurance, fixed assets inventory insurance,IPOEtc..

 

   On the auto industry supply chain enterprises, automobile parts supplier demand for funds is probably the turnover of floating capital, plant construction, equipment purchase, purchase of raw materials, but due to the characteristics of manufacturing enterprises, the financial demand and vehicle manufacturers roughly the same. In the financial service demand, the core advantage compared with the vehicle manufacturers, parts suppliers more emphasis on inventory financing, financing, trade financing, factoring orders and other financial services.

 

   In the automobile market, car dealers is the tie connecting the consumer automobile manufacturers. Its capital demand is mainly new construction, expansion or modification, exhibition hall, to try to drive the purchase inventory procurement of vehicles, spare parts procurement, financial demand is tantamount to OEMs and suppliers. In addition to cash management, inventory financing, financial services, trust is one of its demand point.

 

   In the field of the automobile financial service, commercial banks, financial companies, auto finance companies, Motors Insurance Corporation, car rental companies do, complementary. Commercial banks are the main providers of automobile financial service, service object relates to the whole automobile industry chain, including manufacturers, suppliers, distributors, consumers and the auto financing company, provide financial services for the characteristics and capital operation characteristics of the automobile industry chain. The group finance company is mainly to the automobile group and various funds centralized management of enterprise, based on satisfying the demand of financial services unit members, improve the group of fund and under the control of the member units. Specific financial services include auto financing business--Consumer credit (limited to the group and the subordinate brand), inventory financing, financing lease, as dealers temporary wholesale business loans and other financial business, the group--Cash management, entrusted loans, comprehensive credit, electronic bank acceptance, foreign exchange, settlement, and insurance brokerage business. Auto finance company loan purchase a car, mainly provide dealers to purchase vehicles and operating equipment loans, auto financing lease, rental car residual sale and processing, financial institutions to sell or buy back a car loans and automobile lease financing receivables, and purchase a car financing consulting and agency services for auto buyers and dealers China territory. The Motors Insurance Corporation mainly engaged in motor vehicle traffic accident liability compulsory insurance and the commercial motor vehicle insurance business. As the name suggests, the car rental company to provide car rental services, according to the initiator is different, can be divided into Conventional operating leasing company, leasing company, Vendor leasing company, the dealer leasing company.

 

   The vehicle terminal consumers, the needs of financial services is due to the purchase of vehicles, vehicle insurance consumer loans, lease financing and capital settlement with the manufacturer or distributor.

 

The four perspective:The industry chain of life

 

   Because of the inherent relationship between the natural of auto finance and auto manufacturers, distributors, such as commercial banks, allowing it to run through from the auto parts enterprises, to vehicle manufacturers, dealers, auto logistics group, to the individual consumer finance and after sale service throughout the industry chain, including all aspects of production, circulation, consumption of lease, credit etc. comprehensive, perfect financial service.

 

Vehicle manufacturers:The nerve center of the industrial chain

 

   Ten years into the world, China automobile industry has made attract people's attention scores, automobile production and sales ranked first in the world, Chinese automobile industry has become an important part of the global auto industry, China become one of the world's automobile demand the most exuberant market. According to China Automobile Industry Association statistics,2012Years, the national automobile production and sales1927.18Million and1930.64Million, a record high, once again set a world record, for four consecutive years ranked first in the world.

 

 

Figure 2:2011~2013Monthly auto sales year-on-year changes and

Data sources: Chinese Automobile Industry Association

 

   Although China car market as a whole into the micro growth, but the auto industry concentration increasing. WhileThe Ministry of industry and information technology etc.12Ministries issued "guidance" on accelerating the merger and reorganization of enterprises in key industries, alsoEncourage automobile enterprises through mergers and acquisitions integration of resources, reduce operating costs, increase productivity, cultivating core competitiveness of enterprises, realize the scale, intensive development.

 

   The automobile manufacturer is the core of enterprise of the whole automobile industry chain, but also the whole industry chain information exchange center (central nervous system). At the same time, they are often large enterprise groups, not to hide the IIFC favor. The data shows, the world500Strong in80%Belongs to the combination enterprise finance, transformation and integration mode of the coexistence of a variety of financial organization from the initial financial company to within the same group (six large domestic automobile group combination, see the "figure words treasury").

 

Automobile sales:Funds chain risk and profit center transfer has become the focus of

 

   The rapid growth China automobile industry, automobile dealers also experienced from less to more, from small to big, from decentralized to centralized development process. With the development of the market demand and growth slows down, intensified competition in the market, new car sales increasingly thin profits, risks China automobile dealers gradually, "liquidity", "profitability", there are varying degrees of challenge. In the circulation of the dealers, the capital financing is the key to ensure the normal operation of the new shop, acquisitions, mergers, and the existing4SStore inventory, are rapidly engulfed the car dealer cash flow. In the process of rapid expansion, the dealer should focus on fund security, to avoid the fund chain break risk. In addition, the overall gross margin increased debt rate, and overall gross profit contribution degree drop, cash and cash equivalents assets did not change, the anti risk ability of enterprises are facing challenges, but also need to pay attention to the problem.

 

   With the slowdown in the overall market demand for automobile consumption, automobile consumption behavior gradually mature, consumers pay more attention to vehicle quality and customer service service, more and more dealers will profit from the new car sales center to market sector repair, accessories, boutique, second-hand car, after the transfer of financial services provided. Many aspects of financial service demand, inventory, dealers of automobile covering about mergers and acquisitions, sales promotion and cash management (as shown in Table 1).

 

Table 1: car dealers financial demand and service

Financial services	Automobile finance demand
Inventory financing	Dealers daily business needs	Leverage effect, improve the management benefit demand
About financing	Automobile manufacturers and dealers entered a period of rapid expansion of the network layout	The dealer's own realize scale management
The acquisition of loans	Dealers realize its rapid expansion	The realization of the strategic investors, investment objectives
Cash management	Dealer group to strengthen internal management requirements	The dealer group funding needs to use efficiency
Automobile consumption loans and lease financing	Dealers through cooperation with financial institutions to provide financial support to the terminal consumers purchase a car	In promoting access to financial services revenue vehicle sales at the same time

Fig.3.Auto dealers financial support program product model

Data sources: Minsheng Bank and DDT jointly issued the "Chinese2012China automobile financial report "

 

Commercial bank:Automobile supply chain finance will become an important mode of transformation

 

   With the competition in the banking industry from a single product competition rise to the whole industry chain solution of competition, enterprise funds management and financial service needs more tend to the entire value chain extension, the commercial banks will be the industry and finance combination of supply chain finance as the important transformation, competing to launch industry financial solutions.

 

   Compared with the perfect automobile financial system, the domestic automobile financial market as a piece of virgin land to be reclaimed. As the main body of the domestic automobile credit, commercial banks will be auto financial industry as the future of an important force direction. At present, the mainstream of domestic commercial banks have launched their automotive industry cash management solutions..

 

Commercial bank's cash management solutionsIndustrial and Commercial Bank of China:

 

Automobile manufacturing enterprise cash management solutions

 

   For the automobile manufacturing enterprise cash management requirements, the industrial and Commercial Bank of the solution is mainly covers: in setting the account, for the subsidiary company can use the loan pools of capital accumulation mode; to headquarters and subordinate units, can take two lines of revenue and expenditure or group account collection mode.

 

   Cash management group solution: to headquarters and units directly under the first mode, which uses two lines of revenue and expenditure patterns; the second model is a group account model to manage the company headquarters and units directly under the capital. In the establishment of the whole group account management framework, can rely on a variety of channels to provide convenient and efficient payment service for the company.

 

   Accounts receivable solution: to solve the withdrawal of accounts receivable problems, can provide two kinds of solution:Domestic credit and accounts receivable factoring.

 

Construction Bank:Automobile sales customer cash management industry solutions

 

   The car dealership customer cash management requirements, construction bank solution the general idea:The formation of automobile financial service network, the manufacturers of upstream suppliers and downstream distributors into the financial service system, help car makers advanced vehicle sales quickly. Auto makers for dealers to provide security, commitment to open network bank acceptance to assume the full "overdue repurchase" to dealers for, and to the auto certificate as collateral, banks expanding dealer financing, the bank acceptance bill, meet their financing needs, reduce the cost of financing. A dealer's financing supervision system, reduce the operation risk. Make full use of CCB network resources, unified for dealers to provide standardized services.

 

Bank of Communications:Scheme of automobile enterprise cash management application service

 

   According to the demand of automobile enterprise cash management, Bank of communications solutions mainly covers:

 

   Account management services (combined account) account: build reasonable structure for the enterprise, the headquarters of the group as the group cash management master account, each sub group companies as cash management account, between the main account and sub account according to the centralized management of funds belonging to establish the relationship between the longitudinal.

 

   Payments and liquidity management (Xian Jinchi): the group of subordinate enterprises accounts and payments to co-ordinate the implementation of management, a comprehensive collection of members of the enterprise funds, foreign payment unified arrangement in the Group Corporation completed. Another model is the timing collection mode, group company unified by the end of each day and each member enterprise account fund position, and focus to the cash pool group company account.

 

China CITIC Bank:The automobile finance service scheme

 

   CITIC Bank for the automotive industry manufacturers, upstream suppliers, downstream distributors and consumers to launch the "financial" full financial services scheme. Specific include:

 

   Financial service providers including domestic comprehensive factoring and commercial ticket holding stick; manufacturers financial services include production line construction financing, financing, purchasing notes library services, cash management services; financial services including dealerNote post, corporate account overdraft services, in order to effectively solve the financing problem of domestic automobile dealers;Automobile consumption financial services includeThe mature automobile brand and the consumer market, with automobile consumer credit services for automotive consumer.

 

Industrial Bank:Automobile and engineering machinery industry, financial service plan

 

   According to the cash management demand of automobile and engineering machinery industry, the industrial bank solution covers:

 

   Financial service providers include purchase order financing, accounts receivable pledge (pool), domestic factoring, commercial ticket and paste, silver factory. The dealer financial service including dealer advance financing, confirming warehouse, factory warehouse silver. The end customer financial service plan (including personal mortgage loan business (credit) apply to the purchase of commercial vehicles and construction machinery customers), credit card installment (applicable to the purchase of passenger car of the customer), automobile consumption credit (applicable to the purchase of passenger car of the customer), should receive payment for lease factoring. Auto dealer group financial services including financing, mergers and acquisitions, built car dealer advance financing loans. And manufacturers note pool business, Societe Generale leasing company leasing business, auto finance company business.

 

The automobile finance:Integration and innovation is the key

 

   With the rapid development of automobile industry, the automobile industry chain need innovation, efficient financial services, compared with the foreign countries, the development of domestic automobile finance company started relatively late, but after the last ten years of development, at present, China has successively established17Automobile financial company (Table 2).

 

   Auto wholesale financial services and auto consumer finance is one of two traditional business of automobile finance. Car finance supply more focused on wholesale financing, there are currently more than commercial banks including the people's livelihood, CITIC and peace, development of auto wholesale business, including inventory financing, financing, mergers and acquisitions built loan and cash management. In contrast, due to automobile consumption loans loan amount is low, operation cumbersome, banks in the automobile consumption financial resources invested Co., automobile consumption financial product is the only car consumption loans, credit card installment and automobile financial company loan three, rich products to enhance.

 

   According to research institutions and Commercial Bank statistics,2011Automobile consumption financial product balance3000Billion, the forecast for the next ten years automobile consumption financial China market capacity will exceed10000 Billion,2015 Years of automobile consumption financial market will reach a balance6700 Billion, its market structure as shown in Fig.4.

 

Data sources: Minsheng Bank and DDT jointly issued the "Chinese2012China automobile financial report "

Fig.4 2011And2015Automobile consumer finance market analysis

 

   With the rapid development of automobile industry and integration, its demand for financial service increased. The main wholesale financial market participants for the automobile finance companies and commercial banks. However, by regulators on its capital adequacy ratio, growth in business scale restriction, auto finance companies unable to meet the rapid growth of automobile industry demand for financial services. In this context, part of the automobile financial company in cooperation with commercial banks, respectively play advantages of both sides in the channel management and financing capacity, integrated automobile finance service, to meet the automotive industry to achieve the development of high-speed, health.

 

   In mature markets, financial institutions to provide products to cover the vehicle lifecycle, the integration of the automobile financial service and improve the user experience. Compared with the foreign countries, the current laws and regulations limit the business scope of financial institutions, so the integration of all resources can provide competitive financial services.

 

Table 2:The domestic automobile financial company list

	Company name	Date of establishment	Registered capital (RMB)	Shareholder structure
1	GMAC-SAIC Automotive Finance Co., Ltd.	2004Years8Month	10Billion	Saic Group Finance Ltd.40%General Motors Acceptance Corp.40%), Shanghai General Motors Co., Ltd. (20%) Http://www.gmacsaic.net/Default.aspx
2	Volkswagen finance (China) Co., Ltd	2004Years8Month	5Billion	Volkswagen financial services company (100%) Http://www.volkswagen-finance-china.com.cn/
3	Toyota automobile financial (China) Co., Ltd	2004Years12Month	12Billion	Toyota Financial Service Corporation (100%) Http://www.toyota-finance.com.cn/
4	Three one Auto Finance Company Limited	2004Years12Month	8Billion	Sany Group Co Ltd.92.5%), Hunan province (Trust Co. Ltd.3.75%Hunan Valin Iron Steel Group Co.3.75%) Http://www.sanycapital.com/
5	Ford automobile financial (China) Co., Ltd	2005Years5Month	7Billion	Ford Motor Credit Co.100%) Http://www.ford.com.cn/servlet/ContentServer? Cid=1178852156093&pagename=Page&c=DFYPage&site=FCN
6	Mercedes Benz Auto Finance Company Limited	2005Years8Month	5Billion	Daimler financial services group (100%)Http://www.mercedes-benz-finance.com.cn/
7	Dongfeng Peugeot Citroen Automobile Finance Company Limited	2006Years5Month	5Billion	Peugeot Citroen (Holland financial company50%Dongfeng Motor Group Co.25%Shenlong Automobile Co., Ltd. ()25%) Http://www.dpcafc.com/
8	Volvo financial (China) Co., Ltd	2006Years6Month	5Billion	The Volvo Group Company (100%) Http://www.vfsco.com/financialservices/china/zh-cn/Pages/home.aspx
9	Dongfeng Nissan Auto Finance Co., Ltd.	2007Years10Month	15.29412Billion	Nissan (29.75%), Nissan (Chinese Investment Company Limited ()21.25%Dongfeng Motor Group Co.35%Dongfeng Motor Company.14%) Http://www.df-nissanfc.com/
10	Fiat Auto Finance Company Limited	2007Years12Month	5Billion	Fidis Co. Ltd. (Fidis S.P.A.()100%)
11	Chery Huishang Bank Auto Finance Company Limited	2009Years3Month	5Billion	Chery auto Limited by Share Ltd (80%Limited by Share Ltd (), Huishang bank20%) Http://www.cheryfs.cn/
12	Gac-sofinco Auto Finance Company Limited	2010Years5Month	5Billion	Guangzhou Automobile Group Co.50%), Credit Agricole (personal financial Limited by Share Ltd50%) Http://www.cnpawn.cn/
13	BMW motor finance (China) Co., Ltd	2010Years9Month	5Billion	BMW Ag (58%Bmw Brilliance Automobile Ltd.42%) Http://www.bmw.com.cn/cn/zh/insights/corporation/financial_service/overview.html
14	FAW Auto Finance Company Limited	2011Years12Month	10Billion	The FAW Finance Company Limited (66%Limited by Share Ltd (), the Bank of Jilin34%) Http://af.faf.com.cn/
15	Beijing Modern Automobile Finance Company Limited	2012Years6Month	5Billion	The modern financial corporation (46%), Beijing Automobile Investment Co. Ltd. (40%Hyundai Motor Corporation (,)14%)
16	Chongqing Automobile Financial Company Limited	2012Years8Month	5Billion	Qingling motors (Group) Co. Ltd. (41%), Chongqing Yufu Asset Management Group Co., Ltd. (39%), Chongqing rural commercial bank, Limited by Share Ltd (20%)
17	Rui Ford Automotive Finance Company Limited	2013Years1Month	5Billion	Anhui Jiang Huai Automobile Corp (50%), Santander Consumer Finance Company Limited (50%)

Data sources: China banking supervision and Management Committee

 

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