Research On Optimizing Chery Finance's Financing Structure

The establishment of the first automobile financing company in 2004 marked the transition of China's automobile financing service into a period dominated by automobile financing companies.However.Thanks to the steady growth of China's economy and the rapid expansion of the automobile market,China's automobile finance industry has developed rapidly with remarkable achievements.By 2018,the penetration rate of China's automobile financial market has been over 40%,but it has a gap with the western developed country.However,it is also showing that there is still much room of developing in China's automobile financial market.Moreover,with the advance of financial science and technology,the participation of Internet automobile finance and the support of national policy,China's automobile financial market has a broad prospect.As a capital-intensive industry,the expansion of automobile finance company needs a lot of capital.Compared with the European and American countries,China's automobile finance companies mainly rely on bank credit to raise money.In recent years,automobile finance companies are working to expanding financing channels to raise capital by increasing capital,issuing financial bonds and asset-backed securities and other ways to adjust the financing structure of the company,but they still cannot change the dominant position of bank loans in the financing ways of the company.The improper financing structure limits the company's business expansion and it is detrimental to the future development of companies.Therefore,it is realistic to study the financing structure of the automobile finance company.Based on a certain understanding of the financing status of domestic automobile finance companies,this paper takes Chery Motor Finance Service Co.,Ltd.as an example to analyze the financing structure to find out the solutions to the problems in the financing structure.Firstly,this paper sorts out the research findings about automobile finance service and financing structure at home and abroad.And this article explains the meaning and related theories of automobile fiance and financing structure,and defines the financing structure of automobile fiance company.Secondly,the basic situation of Chery Finance is described briefly,and then the financing environment and the financing scale of Chery Finance are analyzed respectively.The focus of the article is an analysis of the financing structure of Chery's finance.Then we analyze the relevant financial indicators of Chery Finance and other automobile finance companies in the same industry,and we also have the vertical contrast of Chery Finance itself,to evaluate the financing structure of the corporation.The analysis results show that the internal financing of Chery Finance is insufficient,and the debt financing ratio in the external financing is too high.Further analysis shows that the current liability ratio in the company's debt structure is too much,and the long-term liability ratio is too low.There are some problems in its financing structure,such as the insufficient internal financing ability,the unreasonable external financing structure,the single financing channel,the insufficient long-term capital and serious term mismatch.The reasons are mainly due to the strict national regulatory policies,the nature of the automobile finance industry,and the business model of Chery Finance.Finally,with the help of the model,this paper plans the new financing plan of the company,and puts forward optimization suggestions,including strengthening the profitability of the company and improving the proportion of endogenous financing,and attaching importance to equity financing,and adjusting the company's debt maturity structure,and actively expanding financing channels,and more participating in the capital market to raise funds.This also has certain reference significance to other auto financing companies in China.