China's Chery sets up auto finance company

Apr. 23, 2009 (China Knowledge) - Chery Automobile Co Ltd, the largest private automaker in China, and Huishang Bank Corp Ltd jointly launched an auto finance company in Shanghai on Tuesday, the Shanghai Securities News reported.

The joint venture (JV), namely Chery Huiyin Auto Finance Co Ltd, has a registered capital of RMB 500 million. Chery holds an 80% stake in the JV, and the rest goes to Huishang Bank, a joint-stock commercial bank based in Anhui Province in eastern China.

The finance company will provide loans to both dealers and auto purchasers. The company is expected to cover all dealers in the country within two months and expand personal loan businesses to 10 Chinese cities, said Wang Shirong, general manager of the JV, adding that it aims to become profitable in the second and third year.

Chery is the first Chinese automaker to set up its own auto finance company after being approved by the China Banking Regulatory Commission.

China currently has 10 auto finance firms, including nine set up by foreign automakers such as General Motors Corp, Volkswagen AG, Toyota Motor Corp and Ford Motor Co.