Case Study On Auto Financial Leasing Asset Securitization

As the leading country in the world in terms of automobile sales,China’s car ownership in 2017 is less than a quarter of that in the United States.Therefore,China’s current auto market still has more room for growth.The auto finance still has great potential for development.However,China’s auto finance business started very late and its development is relatively backward.Moreover,China’s current auto finance model is still dominated by consumer credit,and the penetration rate of auto financial leasing is very low.At present,the frequency of consumers changing cars in the automotive industry has increased,and the used car market has been active.This paper believes that the auto financial leasing industry will be the general trend of the future development of the auto finance industry due to its unique separation of use rights and ownership.Therefore,it is very important to study the financing channels of auto financial leasing companies so that they can better develop their own business.This paper studies the financing channel of asset securitization of R auto financial leasing company’s,and hopes to provide some reference for other companies in the auto financing leasing industry.R Leasing is currently the largest third-party auto financial company.By analyzing the financial status of R leasing and the amount of business growth,this paper believes that R leasing are currently developing well and its profitability is gradually increasing.The “R Leasing 2017” was established in 2017 with a scale of 2.089 billion.It was the largest auto financial leasing asset-backed securities issued at that time.As of December2018,the principal and interest of the priority asset-backed securities are repaid on time at the redemption date.Therefore,it has certain research significance and value.This article is divided into four parts.The first is the introduction.This part describes the research background and significance of the auto financial leasing business.At the same time,through the review of domestic and foreign literature review,the significance,financing channels and advantages of auto financial leasing are summarized.This part also explains the research content and the methods of this paper;moreover,it puts forward the innovations and inadequacies of this paper.The Following part is the case introduction.An overview of R Financial Leasing Co.,Ltd.,an overview of the asset pool of the asset special plan,product design and reimbursement of securities aredescribed in this section.The next part is the case study.This section explains the motivation for R leasing asset securitization and estimates its cost.The asset pool of securitization of auto financing lease assets was analyzed in detail through five aspects.At the same time,this paper also analyzes the credit enhancement method,risk and pricing of this asset special plan.The last part is the case revelation and suggestions.Based on the conclusions drawn from the case study,this paper proposes suggestions about auto financial leasing asset securitization from the perspective of the original equity,other participants and the regulatory authorities.Through the case study,the following conclusions are drawn.The rapid development of R leasing business,the single financing channel,high cost,and the promotion of industry development are the reasons for its asset securitization.Secondly,this asset special plan has indeed saved the financing costs.Then the asset pool of “R Leasing 2017” is low risk,and the internal upgrade mode and risk control measures effectively improve the securities rating and control the risks.Finally,prepayment behavior has a huge impact on the pricing of this asset-backed securities.Through the conclusions of the above case analysis,this paper proposes three aspects.First,the original equity should establish a new risk assessment system,improve its legal contract,and reduce the risk of early settlement.Second,other participants should establish a sound information disclosure system and strict internal control procedures.Finally,the regulatory authorities should increase industry supervision and strictly review the rules and regulations of each exchange.