A Study On The Automobile Consumption Credit Development Of China Commercial Banks

As one of the important personal loan products, the automobile consumption credit is already a mature financial product in such developed countries as in Europe and the United States, which has not only played a crucial role in promoting the popularization of sedan families, but also brought about rich profits to such financing institutions as running the automobile consumption credit. Since it has been a shorter time for China to officially run the automobile consumption credit operations and, subject to such reasons as the imperfection of the individual credit system,2003-2004once saw a large number of non-performing loans, it has resulted in such a situation in which such large banks as represented by the top four banks of ICBC, ABC, BOC and CCB have become even more cautious in developing the automobile consumption credit. Whereas in recent years, with the sustainable growth of Chinese residents’income, there has been a rapid increase of their demand for the automobiles and the automobile consumption credit; and at the same time, the establishment of the auto financing companies has also constituted a direct competitive relationship in respect to the Chinese commercial banks in their running the automobile consumption credit. Under such a background, what course should the commercial banks follow in their automobile consumption credit operations? It is urgently needed to discuss and research it in theory.Although the automobile consumption credit appears to be the micro finance, yet actually it is closely related to the macro economic development. This dissertation has first analyzed such basic theory of economic administration as related to the automobile consumption credit operations of the commercial banks, such as Marx’s theory of consumption, consumption function theory in macroeconomics, game theory, credit risk management theory, family financial theory, economic growth stage theory and so forth, which has laid the theoretical foundation for the follow-up study. Then it has respectively reviewed and analyzed the development history of the automobile consumption credit in the European and American developed countries, emerging economies and China, in an attempt to explore such development experiences in the automobile consumption credit that can be used for reference. This dissertation has also conducted the deep analysis in respect of both the favorable and unfavorable factors of the commercial banks in their developing the automobile consumption credit from such two angles as of credit demand and credit supply to demonstrate that it would have not only important economic significance but also broad development space for the Chinese commercial banks to develop the automobile consumption credit. It is also a focal point in this dissertation study to compare the advantages and disadvantages of the established auto financing companies with those of the commercial banks in expanding the automobile consumption credit. Generally speaking, subject to the restraints of many such factors as China’s financial regulatory policies and the lessons of the American subprime mortgage crisis, the expansionary business innovation of the auto financing companies would be somewhat converged. Whereas, as long as the commercial banks proceed with confidence and conduct active reforms and innovation, they would still have stronger market competitiveness. The credit risk management is one of the most focused issues for the commercial banks to develop the automobile consumption credit. Through the analytic demonstration in respect of the risk causes of the Chinese commercial banks in the automobile consumption credit in the duration of2003-2004, this dissertation holds that as for the primary causes, the first should be the imperfection of the individual credit system, the second should be the irrationality of the operation and management mode, and the third should be the simpleness and extensiveness. At the same time, it has conducted the game analysis in respect of the business relationship of the commercial banks with all other participants based on the operating mechanism of the commercial banks in the automobile consumption credit and has proposed to build the positive operating mechanism of win-win cooperation and the perfect risk management system of the individual credit operations to create good conditions for the commercial banks to develop the automobile consumption credit. In order to solve the problem of the sustainable development of the commercial banks in the automobile consumption credit, this dissertation has, by means of the analysis of the scale economy, scope economy and automobile finance value chain theory and so forth and in combination with the current operational practice of CMSB and Citic Bank, proposed that the commercial banks would give full play to their own numerous advantages such as the settlement, funding and financial products to provide the comprehensive financial services for all the participants in the automotive industry chain, in which they would not only improve their own competitive advantages, but also obtain comprehensive operating earnings. Furthermore, this dissertation has also, in combination with the current customer demand characteristics, put forward concrete suggestions in respect to the optimization of the existing automobile consumption credit products of the commercial banks in addition to its focused study and analysis of such innovative products as the installment payment in the credit card car purchase and the loans for the second-hand cars. Finally, this dissertation has, focused on such external problems as encountered by the commercial banks in their current development of the automobile consumption credit, raised the targeted measures and suggestions in respect to the perfection of China’s individual credit system, improvement of the legal environment of the automobile consumption credit, optimization of the car purchase and use environment, and so forth.This dissertation has the following main innovative points:1. To conduct an even more systematic study on the automobile consumption credit operations from the perspective of the commercial banks. This dissertation has mainly conducted the systematic study and analysis in respect to the automobile consumption credit operations of the commercial banks from many such angles as of the internal and external environment, regulatory policies, market competition, risk control, operation model, product innovation and marketing management, so as to promote the development of the automobile consumption credit operations of the commercial banks in an all-round way.2. To prove, by use of the empirical approach, that the risks of such automobile consumption credit products as of the family private use and operational compliance are generally controllable. This dissertation has, through the empirical analysis of the risk situations and causes of the automobile credit of a number of subsidiary banks of a certain large bank and various commercial banks in Shandong’s Jinan area, demonstrated that the non-performing loans in the automobile consumption credit are caused mainly because of the loans of the passenger/freight use vehicles and the extensive management of the commercial banks, whereas the risks of such automobile consumptive loans as of the real family use and operational compliance are generally controllable.3. To demonstrate, by use of the reference and comparison method, that the commercial banks would still have considerable market competitiveness in the short and medium terms. This dissertation has conducted the comprehensive comparison and analysis in respect to the automobile consumption credit run by the commercial banks and auto financing companies and combined the current regulatory requirements and business development reality to demonstrate that the commercial banks would still have considerable market space and market competitiveness in running the automobile consumption credit. The commercial banks should seize the current opportunity to actively innovate and expand the automobile consumption credit market and obtain high operating earnings.4. By use of the game theory, to jointly build such a relatively perfect operating mode in the automobile consumption credit by the commercial banks as the center in combination with such interested beneficiaries as the borrowers, automobile dealers and insurance companies (or guarantee companies), so as to realize the long-term mutual benefit and win-win cooperation.