The Research On The Development Of The Auto Financing Company In China

In the last few years there are excellent performances in the manufacture and sale of the automobiles. And the demand for the auto financing services is increasing gradually. I chose to make some study about this topic as viewed from the auto financing company. During the collecting of the materials and the writing of this article, the relevant policies and laws about the auto financing company of China were published formally and were put into practice successively, and the first group of the auto financing companies has begun, their operations. All of these make the background and the environment for my research more certain correspondingly. On this base, I hope my study for the auto financing company can be more well timed and substantial. I also hope that the forward-looking about it can be more practicable.In the first chapter I analysis the circumstance and the development tendency of the Chinese auto market and the urgent demand for the auto financing service. On this foundation, I explain the mission of the auto financing company, the necessity and the essentiality of developing it. In the second chapter, I introduce and summarize the history of development and the experience of the auto financing company in the foreign societies. And make a profound analysis of it from six aspects: the establishment, the financing arrangement, the relationship with the commercial banks, the source of the profits, the extending of the business scope, the business and financing risk controlling, etc. In Chapter 3, by explaining and researching the related laws and policies, I make a deep study about the present status, the problems and the causes of the auto financing company. In Chapter 4, by analyzing the experience of developing the auto financing company in the foreign societies for reference and concerning our actual circumstances, I bring forward some suggestions and the opinions.In this article, I pay a lot of attentions to concluding and summarizing and emphasize on the study of the following three questions while making an integrated analysis:The first question is about the financing arrangement and how to develop the relationship with the commercial banks. I think that the relationship between the two parties will be competitive and the auto financing company will have to look for help from the commercial banks in a short-term and in the future the relationship between them will be competitive and cooperative. In the current time, the simplification of the financing arrangement is one of the obstacles for the development of the auto financing company. Besides acquiring the funds from the banks and the parent companies, the new financing arrangements should be found, such as entering the market of daily interest rates on short-term private loans between the banks, or developing the Automobile Finance Asset Securitization.The second question is about the controlling of business and financial risks. The favorable operation of the auto financing company has a solid and perfect foundation of the credit system that has been established for about 100 years and has strong sanctions to the behaviors of the citizens. In China, there has not a favorable creditenvironment yet. But from 1990s, many credit consumptions have come out. This new development call urgently that the government can build a good set of social credit system. The auto financing company should catch this critical opportunity, cooperate with the related organizations and make efforts together with the government, build up its own risk controlling system.The third question is about the development of the functions. In the foreign societies, the operation of the auto financing company is very extensive. But in China it is limited now in extending loans for auto purchase. And the international experience show that the loans for auto purchase is not the main source of profits for the auto financing company. In regard to the current Chinese credit environment, the exorbitant risks will influence directly the return of the funds and the profits. And the national cr...