28-12-2006 ANHUI
Jianghuai Automobile Co Ltd plans to cooperate with one of the nation's four asset
management companies to set up an auto financing venture, making it the first
Chinese auto maker to tap the auto vehicle loan industry for its self-branded
models, the firm said recently.
JAC, one of China's leading commercial
vehicle producers, would team with China Oriental Asset Management Corp to jointly
establish a auto loan company in Hefei, capital of Anhui Province, with a total
investment of 500 million yuan (USD62.5 million), according to its document filed
with the Shanghai Stock Exchange.
Anhui-based JAC plans to invest 100
million yuan to take 20 % in the venture while its parent, Jianghuai Group, would
take 30 % for 150 million yuan, leaving Oriental with the remaining 50 % for 250
million yuan, the statement said.
"With the establishment of the
finance unit, JAC would be benefiting from a more complete business strategy for
sustained development in the future," the company said.
Once approval
is given by the China Banking Regulatory Commission, the auto loan company will
offer loans to individual auto buyers as well as to dealers to buy new models
and operations equipment.
JAC would become the first domestic auto maker
to break into the fledging auto finance industry with its own brand following
overseas counterparts including Volkswagen AG's and General Motors Corp's joint
ventures in China.
An auto analyst, who did not wish to be named, said
the launch of the auto loan business is part of JAC's preparation to support the
development of its passenger cars as it meets stiff competition from domestic
and foreign auto makers.
JAC, the nation's ninth-biggest auto maker,
plans to develop more than 10 passenger car models ranging from mid-range to high-end
sedans, compact models as well as sport utility vehicles from next year.
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