The automobile industry is undergoing major changes unseen in a century, and it has become a consensus. As one of the components of the industry, auto finance is also facing the impact of great changes. Yu Yarui, director and general manager of SAIC-GM Finance Co., Ltd., believes that China's auto finance industry is also undergoing new changes driven by innovation.

　　Founded in 2004, SAIC-GM Finance Co., Ltd. (hereinafter referred to as "SAIC-GM Finance") is the first auto finance company in my country. In the past 18 years, SAIC-GM Finance has witnessed the Chinese auto market jump from 5 million passenger car sales to the world's largest auto market with nearly 30 million vehicles at its peak.

　　As China's largest auto finance company, SAIC-GM Finance will achieve a corporate credit asset scale of over 150 billion in 2021, and has added more than one million retail contracts for five consecutive years, serving more than 8 million retail customers.

　　A hundred flowers bloom, and the auto finance market continues to expand

　　In 2004, SAIC-GM Finance Co., Ltd. was established, becoming the first auto finance company in my country. In the same year, the Measures for the Administration of Auto Loans was promulgated. Subsequently, Volkswagen, Toyota, GAC, FAW and other auto finance companies were established one after another, and China Auto Finance Corporation officially stood on the stage of history.

　　From the perspective of market players, participants in China's auto finance industry are constantly pouring in, showing a scene of a hundred flowers blooming and a hundred schools of thought contending only in the "Lichun" season: including auto finance companies, banks, financial leasing companies, and Internet platforms have become the competitive auto finance market. of the four main bodies. Among them, there are 25 auto finance companies. In terms of banking, including the four major banks, joint-stock banks, and city commercial banks, they have all become important players in the market. "New forces" are also joining in, and thousands of small and medium-sized car financing and leasing institutions are blooming everywhere. China's auto finance market has entered an era of diversified development in which hundreds of players compete for success.

　　From the perspective of market penetration rate, according to data from Roland Berger and China Automobile Dealers Association, the financial penetration rate of new cars has increased from less than 28% in 2015 to more than 50% in 2020; the financial penetration rate of used cars is also driven by the Internet car platform. It has grown rapidly, reaching about 30%. Of course, the penetration rate of new car finance overseas is mostly over 70%, and the penetration rate of used car finance is also around 50%. There is still some room for development in my country's auto finance penetration rate.

　　From the perspective of market size, in the past ten years, with the continuous development of the auto industry, the size of the auto finance market has also "raised". In 2020, the scale of my country's auto finance will reach 2.2 trillion yuan, with a compound annual growth rate of 25.8% in the past 10 years. The total assets of 25 auto finance companies have exceeded one trillion yuan, accounting for half of the overall market.

　　Driven by innovation, the industry is facing "big changes unseen in a century"

　　Yu Yarui pointed out that in recent years, the automotive industry has faced various challenges, and at the same time, new forces and new forces have gradually emerged. Driven by innovation, China's auto finance industry is also experiencing "great changes that have occurred in a century". Just like before and after the "shocked worms", the spring thunder strikes, and nature swallows the mountains and rivers, spit out the old and accept the new.

　　First, the market is changing. The incremental market has transformed into a stock market. Since the beginning of the 21st century, my country's auto industry has entered a period of rapid development. The production and sales of new cars have ranked first in the world since 2009, and have maintained an average annual double-digit growth rate for the next 8 years, becoming the world's largest auto market in one fell swoop. . By 2018, the auto market has reached an inflection point, and the long-term sustainable growth trend has been reversed. China's auto market has officially transformed from an incremental development market to a stock competition market, and the industrial structure has entered a period of deep adjustment.

　　In addition, the direct sales model of automobiles has taken initial shape. The new car-making forces represented by Tesla have taken the lead in launching a new model of online car direct sales. Under the new sales model, car companies take user experience as the guide and conduct sales management online, while offline brand stores carry more user experience and word-of-mouth communication. Traditional car companies are also undergoing intense transformation. Major OEMs have begun to try to deploy "light stores" in urban business districts. The traditional sales model that has existed for a long time in the automobile circulation industry is changing quietly. In this environment, as an important part of auto sales, auto finance companies are bound to change constantly, building a full-line direct-selling financial business, such as the water of the Yangtze River, which is unstoppable.

　　Second, vehicles are changing, and new energy vehicles are accelerating to replace traditional fuel vehicles. From Wuling Hongguang MINI EV once again defining the "people's car", to the stock market "Ning (De) Index", new energy vehicles and their industrial chain have developed rapidly. According to data from the China Association of Automobile Manufacturers, from January to December 2021, the production and sales of new energy vehicles will be 3.545 million and 3.521 million, up 159.5% and 157.5% year-on-year, respectively. According to the national development plan, in 2025, the sales of new energy vehicles will account for 20%, and in 2035, pure electric vehicles will become the mainstream of sales. Driven by the goal of achieving carbon peak and carbon neutrality, the new energy track will become wider and wider.

　　In addition, under the trend of “new four modernizations” of electrification, intelligence, networking, and sharing, automobiles are transforming from mere mechanical transportation tools in the past to a new generation of mobile intelligent terminals, and hardware-defined vehicles are transformed into software-defined vehicles. . With the rise of new car-building forces, giants such as Huawei, Alibaba, and Tencent joined in, and the software level has become the core hard power of a car. In the future, a smart car will be a smart terminal with four wheels, and the functions of the car can be continuously improved through software upgrades, not only by changing cars. Software will become the core competitive element of the automobile industry, and the business model of automobiles will undergo fundamental changes, and the ecosystem of the automobile industry will be reshaped.

　　Third, people are changing. First, the mainstream car buyers are getting younger. The data shows that from 2021 to 2025, the post-95s and post-00s will become the new incremental main body of the Chinese auto market. The proportion of car purchases by the post-90s generation will exceed 50% in 2025, the proportion of car purchases by the post-00s generation will increase year by year, while the proportion of car purchases by the post-80s and other groups will show a shrinking trend.

　　In addition, the concept of consumers is also changing, from caring about "owning a car" to more caring about "using a car". It is customary to call the post-00s generation Z. The car buying behavior of Generation Z presents several characteristics: First, Generation Z has a stronger awareness of advanced consumption, higher credit acceptance, and more flexible requirements for auto financial products; Willing and willing to accept new car buying and car use concepts. Compared with owning, they care more about experience and pursue "light luxury". The 28,800 Mini EVs can become the new favorite of Internet celebrities, which is an excellent interpretation of the Z generation.

　　Rooted in the industry and boosted the high-quality development of the automotive industry

　　In Yu Yarui's view, auto finance is undoubtedly of great support to the auto industry. "As a bulk consumer product, automobiles have an innate demand for financial support for consumption. At the same time, as the most complex large-scale manufacturing industry, automobiles have a long upstream and downstream industrial chain, and also need matching and stable financial support with the industry." Yu Yarui pointed out that auto finance The company has professional characteristics, the advantages of "service experts" and systematic operation, which can play an important role in industrial finance and effectively stimulate automobile consumption.

　　The first is professionalism. The auto finance company is rooted in the auto industry, and through the collaboration with the OEMs of this brand, under the premise of controllable risks, it will try to expand the coverage of wholesale and retail, and provide stable financial support for the auto industry chain. In the post-epidemic era, many small and micro auto dealers are facing greater operational difficulties and liquidity pressure. Auto finance companies help dealers to tide over the difficulties and fight with dealers through measures such as interest reduction and exemption and delayed repayment. Take SAIC-GM Finance as an example. Last year and this year alone, the company reduced or exempted over 100 million yuan in interest expenses for dealers due to the epidemic and disasters (including floods in Henan and Shanxi, etc.), and provided additional liquidity support of over 1 billion yuan.

　　Secondly, in terms of operation, auto finance companies have worked intensively to build "service experts" in the industry. It has professional processes and systems in product design, business sales, retail approval, customer service and other fields, and improves customer experience through the continuous evolution of its own service level. Take SAIC-GM Finance as an example, the company independently developed the "Little Butler" APP mobile declaration platform. The platform applies mobile internet technology and blockchain technology to change the original computer ordering mode and greatly improve the ordering efficiency. At present, the utilization rate of the "Little Housekeeper" APP has reached 97%, and the average loan approval time has been shortened to 17 minutes, a year-on-year decrease of 11%; over 90% of customers can enjoy an average of 1 hour of extremely fast service from application to loan.

　　The last is systematization. After 18 years of development, the auto finance company has built a three-in-one operation system of "main engine factory, financial company and dealer". The advantage of scale has become the center of information collection and analysis, enabling auto finance companies to continue to maintain stable support for the industry under the premise of controllable risks.

　　Yu Yarui further pointed out that after 18 years of development and practice, auto finance companies have the ability to provide more comprehensive financial support for industrial transformation. In the future, they should closely follow the industry trends and further contribute to the development of the auto industry. Facing changes in the market, auto finance companies need to actively develop auto finance models with existing markets and direct sales channels, and increase product and service innovation around customers' increased purchase, repurchase, and second-hand car demand. In the face of changes in vehicles, auto finance companies need to conduct in-depth research on the characteristics of different vehicle types, especially the customer base of new energy vehicles, in line with the new four modernization trends in the industry, and continue to drive business upgrades with technological innovation. In the face of changes in people, auto finance companies need to focus on customer-centricity, explore automotive "after-market" service scenarios, and try to build a new "ecosystem" of auto finance in the "14th Five-Year Plan" to adapt to changes in the industry and promote the industry. upgrade.

　　"Although the spring is gone, the summer flowers are more beautiful." Since its birth, the auto finance industry has witnessed the glorious history of China's auto market and supported the rapid development of China's auto industry. Facing new challenges and new opportunities, I believe that with our joint efforts, China's auto finance industry will surely overcome difficulties and challenges and usher in a vibrant "summer" together.