On Credit Risk Management Of Auto Finance Company

General Secretary Xi Jinping put forward in the report of the 19 th National Congress of the Party," It is necessary to improve the financial supervision system and keep the bottom line that no systemic financial risks occur." The systemic risk of financial institutions appears as credit risk at the micro level.Although China ’s auto market has experienced rapid development in recent years,China ’s auto output has been ranked number one in the world since 2009,replacing the United States as the world ’s largest new car market.On the other hand,the auto finance industry that has driven it has only a short history of 20 years.Compared with the developed countries ’auto finance penetration rate of over 70%,China’s auto finance penetration rate is only 40%,and there is still a large gap.Due to a series of reasons such as being in the development stage,lacking experience,imperfect related laws and regulations construction,and imperfect personal credit reporting system,the nonperforming loan ratio in China’s auto finance industry currently generally exceeds 0.5%,and it faces higher credit risks.At the same time of rapid development,auto finance companies need to strengthen their ability to prevent credit risks from the inside to promote the sound development of auto finance credit business.Based on this background,the content of this article is mainly divided into four parts: first,it introduces the current development and credit risk management status of China ’s auto finance industry,and summarizes the four characteristics of auto finance credit risk;second,it selects Chery Huiyin Bank as the specific case,and Comparing its non-performing loan ratio with the industry average and other companies in the industry for five consecutive years from 2014 to 2018,it intuitively reflects the problems of Chery Huiyin’s credit risk management: poor credit review before lending,and distribution during the loan The negotiation policy has not been implemented,the post-loan collection pressure is heavy,and the management has expanded blindly.After that,based on the company’s current credit management status,the cause of the problem is analyzed from four aspects: pre-loan,midloan,post-loan,and overall corporate governance.The information is asymmetry between the former and the customer,the management process of the cooperative dealer is not clear during the loan,the risk management links and indicators are missing after the loan,the organizational structure and human resource structure are unreasonable;finally,the above issues are extended to the entire auto finance industry,combining foreign experience,Put forward suggestions to improve credit risk management in China’s auto finance industry.There are three kinds of research methods used in this article: First,a case study method,which analyzes the problems existing in the case of Chery Huiyin’s credit risk management before,during,and after the loan,and proposes reconstruction suggestions;the second is a literature research method,which extensively refers to automobiles The relevant literature and industry statement data of credit risk management in the financial industry lay the theoretical foundation for this article.The third is a comparative analysis method that compares the non-performing loan ratio of Chery Huiyin with the industry average level,and intuitively reflects the company’s credit risk management The problem.Through the study of the case,the paper draws the conclusion that the foreign currency exchange rate risk management of the airlines industry has its necessity in prevention of debt risk and increase of shareholders returns and feasibility of policy and operation.The innovations in this article are reflected in the following three aspects: First,the existing financial research on credit risk management in the automotive finance industry with less theoretical research is selected.The entry point is novel.The research conclusions are for regulating and promoting the development of the industry and enriching the credit risk in the automotive finance industry Management-related theories all have some significance.Second,the case company Chery Huiyin has outstanding problems in credit risk management,has strong representativeness and research value,and combines credit risk management with the company’s specific business during the research process.Finding problems from the above,and put forward suggestions for restructuring credit risk that is different from commercial banks and other financial institutions,and more suitable for Chery Huiyin and auto finance industries;Third,existing research often focuses only on the risk management of retail loan business Ignoring the research on dealer loan business,this article fully considers the different characteristics of retail loan business and dealer loan business in analyzing Chery Huiyin’s business process and credit risk management process,and the analysis is more comprehensive.