China's Passenger Car Operations Of Financial Leasing

Featuring the function of financing, sales promotion, investment and asset management, financial leasing can closely integrate industry, trade and finance. It entered into Chinese auto industry since 1980s, which has integrated the above mentioned three markets and guided the orderly capital flow, thus playing an important role in promoting the development of Chinese auto market. However, for some historic reasons, as well as fuzzy policies and shortage of supervision during the period of economic system transformation, the financial leasing of passenger cars in China could almost be called as management in "disguised forms" at that time, which caused a series of problems, so it was forced to stop in the past. Entering into the 21st century, China has developed into a big power of auto industry and auto consumption. But compared with auto automobile manufacturing industry, financial service of automobiles is still lacking behind. While as another important tool of auto finance and the favorable supplement to auto consumption credit, financial leasing has only been applied to the field of few commercial cars, without any tracks in passenger car market.By studying on the current status of financial leasing for passenger cars in China, this paper discusses the reasons why auto manufacturers, dealers and auto leasers are standing in an embarrassing position, what makes them feel powerless and frustrated toward this sun rising industry of financial leasing, and seeks out problems in Chinese financial leasing of passenger cars. It analyzes the opportunities of developing financial leasing of passenger car under the current new economic environment and political environment, learns some successful experience from other countries in terms of this field. Starting from Chinese national situation, this paper proposes favorable countermeasures and suggestions to developing the financial leasing for passenger car market in terms of financing channels and cooperation, selection of target customers, expansion of marketing service, selection of operational mode, as well as risk control.