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DaimlerChrysler Financial Services, the finance arm of the German-US auto giant, yesterday kicked off operations in China with the official opening of a wholly-owned subsidiary in Beijing.
DaimlerChrysler Auto Finance (China) Ltd will offer loans to customers and dealers in the world's No 3 and fastest-growing auto market.
It is the fifth global car manufacturer to do so, following General Motors, Volkswagen, Toyota and Ford.
However, DaimlerChrysler is the world's first car manufacturer to offer financing for both cars and trucks in China, according to Till Becker, chairman and chief executive officer of the group's Northeast Asian operations.
"Whether you are financing a Mercedes-Benz sedan, a Chrysler mini van or a whole fleet of Mercedes heavy-duty trucks, DaimlerChrysler Auto Finance (China) Ltd will make it easy to put our customers behind the wheel," Becker said yesterday at a press conference in Beijing.
The subsidiary was approved by the China Banking Regulatory Commission (CBRC) in September with a registered capital of 500 million yuan (US$61.7 million).
Wolf Bay, managing director of DaimlerChrysler Auto Finance (China) Ltd, said the company will work closely with dealers, first in Beijing, Shanghai and Guangzhou, to offer loans to customers.
The company aims to have some 3,000 retail contracts "in a prudent approach" next year, Bay said.
Analysts said the auto financing business has potential but still faces a lot of obstacles.
Currently, only 10 percent of new vehicles in China are financed, far less than the more than 70 percent in Europe and the United States.
The biggest hurdle is the lack of a sound credit information system.
DaimlerChrysler announced in September that it plans to invest US$1.5 billion to build cars, vans, buses and trucks in China in the coming years.
The group's recent joint venture with the Beijing Automotive Industry Corp will build Mercedes-Benz E and C-Class sedans.
DaimlerChrysler also intends to make the Chrysler 300C small sedan in the venture, which is producing Cherokee and Mitsubishi sport utility vehicles.
The group is negotiating with Beijing Automotive to form a venture to produce Mercedes heavy-duty trucks.
DaimlerChrysler also has a plant in East China's Fujian Province to make Mercedes vans.
Becker said sales of Mercedes-Benz sedans as imports in China grew by 22 percent year-on-year to more than 11,000 units in the first three quarters of this year.
Chrysler's imports in China surged by 82 percent to 1,627 units in the period. Meanwhile, sales of the venture in Beijing reached almost 25,500 units, up 22 percent.
Industry statistics showed sales of China-made vehicles increased by 10.12 percent to 4.14 million units in the first nine months of this year.
(China Daily November 3, 2005)
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