| Auto industry is highly related to a country’s economic development, which plays very important role in social development because of its long chain of the industry and strong power to drive consumption and employment. Automotive finance service appeared in western countries nearly a hundred years ago when auto industry developed prosperously. It is not only an effective solution to balance production and demand but help to find other profitable opportunities in the automotive aftermarket as well. It becomes supportive power to lead auto industry to sound development.In foreign developed countries, auto finance service is mainly offered by professional automotive finance company. To the contrary, there is only 17 professional automotive finance companies in China, between which and western developed countries there is still big gap in terms of both quantity and specialization. Considering that China automotive finance company is now in the beginning, when the industry and market both lack of the ability to manage by them and the reform of China finance market is in the progress when there are a few laws and regulations regarding auto finance company to be improved, it is necessary to get government involved in the establishment of policy and laws and careful supervision, by means of which, it helps build a healthy and orderly automotive finance market in China.After investigation and analyzing current China government’s supervision laws and regulation toward automotive finance company, it is found that there are mainly four problems:(1) too much higher barrier of company establishment, larger amount of register capital and limitation of payment of capital and main investors restrict the development of China automotive finance service market; (2) lack of laws and regulation cause automotive finance company unable to run other kinds of auto finance except of auto loan such as auto leasing, used car loan, etc. which are the main auto finance business in western countries; (3) few channel of financing causes higher cost of capital to automotive finance company; (4) as China personal credit system is not perfect now, it is difficult to automotive finance company to collect accurate credit information so that automotive fiance company has to meet with higher credit risk when running business.After summing up the government developed countries and learn from the experience of the automotive finance regulation, to the issues listed above, it is recommended that:(1) to further reduce the conditions when establishing an automotive finance company; (2) to improve the system of supervision to automotive finance company, enrich laws and regulation about other kinds of auto finance business except of auto loan; (3) to further clarify the structure of ABS operation law and establish risk control system, by means of which automotive finance company can decrease the cost of financing; (4) to improve personal credit law, not only basic law but also some regulation about the criterion of usage of credit information and how to guarantee personal information right, which will help provide a healthier credit environment. |
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