China's largest domestic carmaker, the Anhui Province-based Chery, said on Tuesday that it had set up an auto finance company in cooperation with Huishang Bank, also based in Anhui, after receiving approval from the China Banking Regulatory Commission.
The venture, called Chery Huiyin Auto Finance Co. Ltd., will be the 10th auto finance company in China but the first exclusive domestic joint venture.
The vast majority of Chinese vehicle buyers still pay cash.
According to Chery, its auto finance company has a registered capital of 500 million yuan (72.78 million U.S. dollars), of which Chery holds a controlling stake of 80 percent while Huishang has the other 20 percent.
Chery said the finance company would provide loans to both dealers and auto buyers.
Chery Automobile spokesman Jin Gebo said the expansion of Chery's business was expected to boost the competitiveness of Chery's products and the brand.
China's first auto finance company opened in August, 2004 when General Motors Acceptance Corp. and Shanghai Automotive Group Finance Corp. set up a joint auto finance company.
Source: Xinhua
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