The scale of the automotive financial market will reach 2 trillion BMW Financial Four-time increase in capital

At the end of July, the Beijing Banking Regulatory Commission website showed that the registered capital of BMW Automotive Finance (China) (hereinafter referred to as “BMW Finance”) has been approved to increase from 4.8 billion yuan to 9.8 billion yuan. As a result, BMW Finance will also surpass Mercedes-Benz Auto Finance and become the largest domestic auto finance company with registered capital.
In addition to its registered capital, BMW Finance surpassed SAIC General Motors Finance in asset size last year and became the largest domestic auto finance company with assets. In response to the replenishment issues and the related strategic layout and development content of BMW Finance, the reporter contacted BMW Financial Public Relations Department, but the other party is not convenient for interviews.
Rapid growth <br> BMW Finance, which was established in November 2010, has grown rapidly. At that time, its registered capital was only RMB 500 million, of which BMW Group held 58% of the shares and BMW Brilliance Automotive Co., Ltd. held 42% of the shares.
However, as the scale of domestic automobile production and sales continue to increase, the growth rate of the luxury car market has increased, and the registered capital of BMW Finance has also increased. In April 2012, January 2013 and November 2013, BMW Finance successively made three additional capital increases. With the expansion of shares, the registered capital also increased from the initial RMB 500 million to RMB 4.8 billion, ranking the company with the largest registered capital in the automotive financial industry.
However, with the large-scale capital increase and expansion of Mercedes-Benz Auto Finance in July 2015, the registered capital was 5.483 billion yuan, which robbed the auto industry of its registered capital position. BMW Finance ranked second. Now with the completion of the next capital increase of BMW Finance, it is regaining its first place.

As a first-line luxury car brand, BMW Finance has made remarkable achievements in the development of automotive finance. Public data shows that BMW Finance grew by 663.6% in 2016, ranking second; from a net profit perspective, BMW Finance ranked first with an increase of 81.89%. In terms of interest on the key sources of revenue, BMW's net interest income growth rate was 41.76% in 2016.
The reporter learned from the 4S shop that BMW Finance currently offers three types of car purchase plans for young car buyers: First, UFI loan financing plan, the down payment ratio is 20% to 60%, the loan term is 36/48 months, and the interest rate is 7.88% /8.88%, the annual repayment amount accounts for 13% to 20% of the loan amount; Second, Yue loan financial plan, the down payment ratio starts from 20%, the loan term is 12/24/36 months, and the interest rate is 0.88%/5.88%/ 6.88%; The last one is called Elasticity Loan Financial Plan, the down payment ratio is 20% to 60%, the loan term is 24/36 months, the interest rate is 6.88%/7.88%, and the elastic endowment ratio is 0% to 30%.
"As consumers become younger, the way of car purchase tends to be gradually increased. The monthly repayment amount and the down payment ratio are all factors that affect the final transaction." BMW sales staff said, "More people choose loans at the moment." Buying cars, so these programs have a clear help for new car sales."
Challenges intensified <br> From BMW Financial's net profit growth in 2016, it can be found that auto finance has now become one of the important payment options for car purchases.
In simple terms, auto finance is a way for consumers to apply for a preferential payment method to an auto finance company when they purchase a car, and they can also choose different models and different payment methods according to their individual needs.
It has been 13 years since the implementation of the “Administrative Measures for Auto Finance Companies” in 2004. Subsequently, the policy was continuously adjusted. During the ten years between 2004 and 2014, the auto financial market gradually took the path of normalization, specialization, and large-scale development. The entire market showed a stable situation of competition and cooperation.
In 2016, the total market size of China's Internet auto finance will reach 1.1 trillion yuan, and it is expected to reach 1.85 trillion yuan by 2018, of which the market scale of internet auto consumption finance will be as high as 1.2 trillion yuan; forecast shows that by 2020, China The scale of the automotive financial market may reach 2 trillion yuan. (China Vehicle Vision zjcsj2014)
In such a market with unlimited future potential, BMW Finance is also facing challenges in this market as the big player in the player camp of the financial industry's first-tier companies. In this market, there are both traditional player banks that belong to the first echelon and manufacturer finance, as well as second-tier financial leasing companies and guarantee companies. However, the biggest challenge and “threat” comes from the third echelon that relies on the Internet platform. , which is the Internet auto finance company.

Although the third echelon is relatively shallow compared to the first and second echelon companies such as BMW Finance, it is undeniable that it poses challenges for the industry. Chen Pengyun, the founder of Peanut Good Cars, believes that “Although companies such as BMW Finance have the obvious advantage of customer groups and industry qualifications, Internet auto finance companies are able to provide diversified financial products and can achieve rapid approval. A low down payment can stack service value."
Therefore, in terms of BMW Finance, apart from grabbing market share in the market with clear prospects, it also needs to resist the pressure from the third tier and how to maintain its own influx of fresh blood. Vitality and competitiveness are also challenges that BMW Financial deserves to consider.
Tenacity extension <br> In the current development of the automotive financial market, BMW Financial will also focus on the financial leasing market in addition to its own credit business.
In 2015, BMW Finance acquired the domestic car rental supplier Pioneer International Financial Leasing Co., Ltd. (hereinafter referred to as “Pioneer Leasing”). Since Pioneer Leasing was established in 2009, its business focus has been on vehicle leasing. Currently, it has obtained licenses for operating leasing businesses in more than 58 cities nationwide.
Some industry insiders believe that the reason why BMW Finance has acquired Pioneer Leasing is, to a large extent, the desire to leverage on Pioneer Leasing's superior resources in the leasing business sector to enrich and expand the business of BMW Finance in the automotive finance field. To a certain extent, BMW Financial is betting on financial leasing in order to grab the share of the automotive financial market.

Auto finance leasing means that consumers pay a certain percentage of the down payment or security deposit, and pay the agreed rent every month, and they can use the car. After the expiration, they can choose to obtain ownership of the vehicle or replace other vehicles. At present, this consumption mode accounts for no more than 10% of new car purchases, but the room for growth is very impressive.
According to Mei Songlin, vice president of JDPower and General Manager of China, “BMW Finance, as a vehicle company, has a clear competitive advantage in the automotive financial market, and is more focused, professional, and able to develop in depth; it understands not only the needs and products of manufacturers, but also It also understands the needs of consumers and can also serve the dealers closely. Compared with banks, its challenges are also obvious: the limited market size and high financing costs are limited by the market performance of the manufacturers.”