On January 15, the People s Bank of China (PBC) convened in Beijing the Symposium on Financial Services for the Auto Industry, and Deputy Governor Liu Shiyu attended and addressed the meeting. Governor Liu called on the banking sector to provide comprehensive auto finance services to support the restructuring and revitalization of the auto industry so as to put into play the role of the auto industry in driving domestic demand and consumption.
Representatives from the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Commerce, the China Banking Regulatory Commission, the China Association of Automobile Manufacturers, state-owned commercial banks, auto finance companies, car manufacturers and dealers participated in the meeting.
Liu pointed out that the State Council has defined the auto industry as one of the ten pillar industries to which priority should be attached. Providing sound auto finance services to support the restructuring and revitalization of the auto industry is of strategic importance for maintaining growth, expanding domestic demand and restructuring the economy.
The State Council regular meeting chaired by Premier Wen Jiabao on January 14 reviewed and passed the auto industry revitalization plan and detailed supportive measures. The banking system should study and implement the principles outlined in the State Council meeting and the revitalization plan, improve auto finance services, accelerate innovation, streamline auto financing management systems, expand financing channels to include manufacturer loans, auto consumption credit, financial bonds, inter-bank lending, securization, auto leasing and insurance, find reliable financing sources and create institutional guarantee for auto financing so as to support automobile manufacturing, drive consumption and make bigger contribution to developing the auto industry and expanding domestic demand.
Liu emphasized that developing automobile consumer loans renders important support to the expansion of automobile consumption. Policy outcome has shown that strengthening portfolio management of auto dealer loans is a critical part in promoting financial institutions to expand automobile consumer loan.
Car dealers should protect their business reputation more effectively through self-disciplined management and creating an industry-wide credit guarantee system. Given the potential of China s automobile consumer loan market, the PBC will support relevant regulatory authorities to establish new auto finance companies and broaden their business scope according to the actual needs; encourage commercial banks to cooperate with auto finance companies, draw on international experiences and best practices so as to put China s auto consumer credit on a stable development track and promote auto consumption in both urban and rural areas.
A PBC preliminary survey shows that as of the end of 2008, outstanding automobile consumer loans issued by various financial institutions recorded 158.3 billion yuan, including 74.3 billion yuan loans from state-owned commercial banks, 31.1 billion yuan loans from joint-stock banks and 31.8 billion yuan loans from auto finance companies, 21.
7 billion yuan short-term financing bills and 2 billion yuan medium-term notes issued by domestic automakers and automobile spare parts manufacturers on the inter-bank bond market, and 1.99 billion yuan asset-backed securities on the inter-bank bond market with personal automobile consumer loans as the underlying assets.
