Overview of Automobile Finance Companies Operating in China

In China, a total of 24 OEM-financed companies were operating automobile finance sector as of April 2022. At the end of 2020, total assets of automobile finance businesses stood at 977.5 billion CNY, up 7.9% from the previous year (this figure also includes Hawtai Auto Finance which ended automobile finance operations in June 2021). In addition to commercial banks, OEM-led automobile finance companies are also facing intensifying competition as financing from online companies and leasing companies continues to diversify.

With the growth of the automobile finance market, companies have been securing funds for business expansion. Since 2018, out of the 24 above- mentioned companies 15 have increased their capital. Five foreign companies (GM, VW, Toyota, Mercedes-Benz, Nissan) have increased their capital by a total of 15.2 billion CNY, while the other 10 Chinese companies (GAC, Sanyi, FAW, JAC, Great Wall, BYD, Dongfeng, Brilliance, Geely, Sinotruk) have raised their capital by a total of approximately 13.85 billion CNY.

Some finance companies have also issued bonds. Since 2019, six foreign companies (GM, Toyota, Ford, Mercedes-Benz, Nissan, Hyundai) have issued a total of 45 billion CNY in bonds, and another three Chinese companies (Chery, GAC, Changan) have issued a total of 9 billion CNY in bonds.

In the ever-growing Chinese electric vehicle market, emerging manufacturers such as NIO, Xpeng, and Li Auto have not established finance companies so far, but they provide financial services through commercial banks and leasing companies.