Research On The Influence Of Group Investment Characteristics On Auto Dealer Loan Default Rate

In recent years,affected by the relevant national vehicle and purchase restrictions,the increase in domestic auto brands,the rise of new energy vehicles and other factors,the market competition in the auto industry has become increasingly fierce,and the decline in auto sales profits has forced auto dealer groups to seek New profit model.Compared with large dealer groups,single-store dealers have no greater advantages in negotiating with manufacturers and responding to market competition.Therefore,dealers are gradually changing from a single-store development to a group development model.At the same time,in order to obtain greater cash flow,the auto dealer group has begun to carry out diversified investment behaviors,hoping to play a good role in promoting the development of the group.However,in recent years,some large auto dealer groups have continued to have financial problems,and they have even reached the brink of bankruptcy.Investigating the reasons,many are due to the failure of investment,leading to the break of the capital chain,and then the domino effect,which seriously affects the development of the group.For t he research on dealer groups,the existing literature mainly focuses on the introduction of dealer group’s fund management and the credit risk of financial institutions.Few scholars have studied its influence on loan default rate from the perspective of dealer group’s investment characteristics.This article focuses on how the four investment characteristics of the group’s investment in automobile 4S stores,brand types,and the number and types of companies investing in non-automotive industries have an impact on loan default rates.Use the investment characteristics and loan default rate data of 200 dealer groups in2019 to test the theoretical hypothesis.Four conclusions are drawn through empirical analysis: First,the more 4S shop brands invested by the auto dealer group,the lower the loan default rate;second,the more 4S shop brands the group invests,the higher the loan default rate.High;third,the loan default behavior is not necessarily related to the number of non-automotive companies invested by the auto dealer group;fourth,the more types of non-automotive companies invested by the group,the lower the loan default rate.The research conclusions of this article put forward two suggestions for the investment management of auto dealer groups and the credit risk management of financial institutions.In terms of auto dealer investment management,dealer groups should focus on the accumulation of single-brand numbers while expanding their operating brands.In order to increase the bargaining chip with auto manufacturers.At the same time,for investment in non-automotive fields,automobile groups should diversify their categories and share risks,instead of putting eggs in one basket.With regard to the internal control of auto finance credit,financial institutions should strictly control the various links before,during and after the loan,and regularly pay attention to the auto dealer group’s investment in the auto and non-auto sector to effectively avoid loan defaults.