Research On Financing Strategy Of XINGKONG Auto Sales Co.LTD

China’s passenger car market has experienced a development process from expansion to gradual slowdown and steady improvement.Since 2016,affected by the economic situation,the growth rate of automobile consumption in the terminal market has slowed down,and dealers are faced with a sudden increase in sales pressure.In order to cope with the changes in the economic situation in 2018,the state has carried out macro-policy adjustment.Under the dual policy guidance of deleveraging and strong supervision,financial institutions’ support for the auto industry is fading,and even they gradually adjust to maintain a prudent attitude to intervene,and the bonus of the auto sales industry gradually disappears.On the other hand,the monetary policy of the national quantitative easing has a clear target,and the main support flows to central enterprises,the government and real estate.The capital flow and credit scale of non-manufacturing automobile related industries are reduced,that is,the financing support available to automobile dealers or dealer groups is significantly reduced.On the one hand,the sales pressure increases and the speed of capital return slows down or decreases;on the other hand,the financing scale is limited and the amount of loans available for operating turnover is reduced.The double pressure leads to unprecedented tension in the capital flow of dealers or dealer groups.Faced with this situation,each dealer adopts different ways to alleviate the financial pressure,but with little effect.In addition,some dealers use improper methods to increase a large number of financial expenses,which aggravates the financial strain.Therefore,how to ensure the stability of capital flow,how to reasonably plan the source and use of funds,and how to regulate financingrisks have become prominent problems faced by dealers or sales groups in the operation and development.In this paper,star auto sales co.,ltd.as an example,the use of case analysis and literature analysis,financing decisions for the enterprise and management problems are studied.By describing the current financing status and capital use status of star automobile sales co.,LTD.,and combining the profitability of the enterprise,the paper analyzes the problems existing in the financing decision and management of star automobile sales co.,LTD.With the case analysis method.First of all,unplanned financing causes enterprises to bear extra high financial costs,which aggravates the burden of enterprises.Secondly,mutual guarantee between enterprises will increase the debt repayment risk and expand the risk exposure.Finally,the funds in the store cannot be controlled and used independently by the enterprise,which reduces the enterprise’s independent operation ability.After analyzing the existing problems of the enterprise,based on the theoretical literature and the previous research results on the financing problems of automobile dealers,and combining with the actual situation,the paper concludes that star auto sales co.,ltd.still has the root cause of the risk of capital chain rupture under the condition of strong profitability.Aiming at the problems existing in the financing channels,use rules and decision-making management of Xingkong automobile sales co.,LTD.,this paper analyzes the causes of the problems based on the theoretical achievements of predecessors and puts forward optimization Suggestions.First of all,to improve the professional level of management,establish a sense of risk;Secondly,a clear financing authorization system should be established to ensure that all functional positions of the enterprise have systems to follow,so as to avoid the "one-word rule" of the enterprise.Thirdly,the financing channels should be sorted out and standardized to ensure the stability and safety of enterprise financing channels.Finally,the financing platform set up by manufacturers should be reasonably utilizedto obtain lower financing interest rate and more stable financing channels by relying on the dominant position of oems.Through the above measures to help the enterprise to improve the financing decision-making and management ability,to ensure that the enterprise capital flow is stable and abundant,and thus enhance the internal competitiveness of the enterprise.Star automobile sales co.,LTD.As an influential big dealer in the industry,its rapid decline and even bankruptcy have sounded the alarm for other industry participants.The study of the reasons for its failure can be used for reference by other automobile dealers in improving the scientific financing management and the rationality of capital express.