The Application Analysis Of Asset Securitization In Automobile Finance Companies

With the improvement of China's economic development,residents' income has gradually increased,the number of car ownership has continually increased and the consume entities tends to more and more younger.As a result,the demand for personal vehicle loans has increased significantly,which has promoted the development of China's auto finance companies.At the same time,the number of auto finance entities is increasing,and auto finance companies must need more financial supports in order to be invincible in the fierce market competition.However,auto financing companies also face challenges in financing because traditional financing mode is too difficult to meet their financing demands.Asset securitization is a kind of effective financing modes which can solve financing problems of auto finance companies,meet their growing financing demands and is worth promoting.The application of asset securitization in our country is relatively immature,so researches on it are not only of theoretical significance but also of practical significance.Based on the theory of finance and economics,this article takes the history and status quo of the development of auto finance in China as a background,and uses case studies and other methods.It takes the case of Debao Tianyuan 2016 personal auto loan asset-backed securities initiated by BMW Automotive Finance Co.,Ltd.as an example and analyzes many specific products.Firstly,the product is introduced.Secondly,the Static Cash Flow Yield,the Static Spread and the Monte Carlo are used to analyze the pricing of the product.Third,the credit enhancement of the product was analyzed from both internal and external aspects.Fourth,analyzing the risks faced by the product,mainly analyzing the product's credit risk,liquidity risk,operational risk,and early risk.Finally,based on this product,domestic and foreign experiences are given to auto finance companies,trust companies,and government also put forward corresponding suggestions for improvement.Including auto finance companies can start from several aspects: focus on credit risk management,broaden the geographical distribution of pool of assets,and improve loan methods so as to improve the quality of loans.It is necessary for trust companies to strengthen auditing of pool assets Standards,improve product design abilities and promote review of the loan service institution.The government should not only establish a sound credit rating system but also pay attentionto liquidity issues and speed up the process of market transactions construction,etc.,in order to provide great references for auto finance companies to carry out asset securitization projects and give typical examples to trust companies for better participation in asset securitization.