Opening Auto Finance Services in China

On August 5 2004 GMAC-SAIC Automotive Finance Co. Ltd began to operate in China. The venture was established by General Motors Acceptance Corporation and Shanghai Automotive Group Finance Corporation. The registered capital of the new venture is Rmb500 million. Thereafter, on August 12 2004, Volkswagen Financing (China) Corporation (VWFC) received a licence from the China Banking Regulatory Commission (CBRC), which allows VWFC to provide auto finance services in China. This is the first time that the Chinese government has licensed a foreign company to provide auto finance services in China. It has been reported that some other automotive companies, such as Ford Motor Company, have recently submitted their applications to the CBRC for a licence to undertake auto finance services. Hence Chinese commercial banks' long-standing monopolization of auto finance services has been broken.