Dealer repeat mortgage money shortage spread risk pushing car financing

Posted on 5/27/2015 3:59:18 PM

Shanghai and Shenzhen stock market to new highs, investors collectively "bonus", a national wealth by the capital-driven action in the ascendant. But Wang Gang (a pseudonym) recently how the mood is not good. "I feel all walks of life are now talking about the money, but I was in a rush to borrow money."
Dealer shortage of money spread
Wang Gang, head of the Shanghai region is an independent brand 4S stores. This year, although the market share of independent brands, fell to rise, but Wang Gang investment brands as relatively simple models, and sales and not much improvement. Combined with the joint venture brand price war led to the end of the market price "upside down", and manufacturers to pursue glamorous high data brings auto inventory, so Gang feel difficult.
"Cars originally capital-intensive industries, to take stock, it even 1.5 times the normal inventory coefficient (stocks is 1.5 times the monthly sales), if you sell 60 cars a month, 90 stocks, with a The average price of 70,000 yuan car count, stock funds will take nearly six million coupled with labor, land leasing and other financing costs, such as on a rough estimate of the monthly operating costs also need 500,000 to 600,000. "Gang told the "Financial Times" reporter, "but you basically lose a single car dealers, aftermarket although able to fill it, but basically their own brand of customer price between 300 to 500 yuan, and joint ventures simply immeasurably. plus we did a three-year, low customer retention, so aftermarket support on profit rather limited. "In this context, such as the Gang dealers must by all means, seek financing channels.
A staff member of Bank of China's western region, told reporters that the four major state-owned bank car loan business in general are aimed at consumers, and relatively small individual loan business for car dealers, which is mainly based on dealer profitability and repayment ability to consider. "Before we give auto loans are more traditional, basically need to join forces with the manufacturer, which was guaranteed by the manufacturer to take out a mortgage certificate before they can lend. If you are an individual dealers to credit, we will ask its provides third-party guarantees or real estate, fixed assets as collateral, inventory (cars) in general we are not recognized. "insider snow in Northeast China a state-owned bank (a pseudonym) told reporters.
However, since the majority of car dealers are leasing land without adequate collateral, therefore, relatively limited dealer banks acquired by funds. Persons "Some small banks may also provide loans to dealers, the amount from a few million to tens of millions will have, but we mainly do joint venture brands, own brands basically do not do." Southwest area of a commercial bank He told reporters.
In this context, many manufacturers have set up their own finance company, for dealers to provide financial support. "But it is mainly concentrated in the front car wholesale, back-end penetration is relatively small." Gang disclosed. In His brand of financial companies, although each car wholesale end, finance companies can give up to 90% of the dealer financial support, but also for the return of the funds we have a very strict management. "After the car sold, the general requirement is to repay within 24 hours." Gang told reporters.
This means that, outside of the new car, Wang Gang also must "diversion" of funds to meet operational needs. Large dealer groups can rely on glossy book data to obtain bank credit approval, and listed group may be operating funds through the capital market, "small dealers in the context of limited bank financing, would have to take the risk, through a number of gray channels to finance because if there is not enough funding sources, the final result on the left foot up. " Gang helpless smile.
The past two years, dealers foot chain scission and financial situation after another. However, in the above distributors, in addition to the same small dealers and Wang Gang, but there are some large dealer group or listed companies. In early March, the media exposure has been listed on the NYSE dealer Beijing United Tinto Group scission of funds resulting from the mortgage can not be redeemed at the bank certificate is not on the cards after the consumer car incident is an example.
Stumped forced dealers to take the risk of financing
In fact, dealers thirst for capital has always existed. However, in a good year for automobile sales, dealers based on the desire for money to make larger and more long-term vision. And at the moment, the long-term vision was transformed into reality support, there is enough money to "live" it longer.
"This year's auto market situation Depression and in 2008 almost, but at that time, although the external economic environment is not good, but the demand is still, the state has adopted a policy to stimulate the automobile market dynamic was immediately pulled, when the dealer basically kept to themselves. but now has little room for incremental auto market, dealers want to live, you can only fight for a job from the others hand, by the foundation and the strength. "Another dealer who Tang Ming (pseudonym) said.
The so-called foundation and strength, on the one hand is the dealer's own profitability, the other is Wang Gang mentioned financing capacity. Some listed companies in China Automobile Dealers Association's 2014 revenue figures show that last year, although the listed dealer group scale increase in total assets, but listed in 11 dealer groups, only one weighted ROE to maintain positive growth In addition, the remaining business year on year decline in varying degrees, on average fell 3.28 percent. This means that auto dealer group in 2014 significantly decreased the overall profitability of the listing. In the financing, Automobile Dealers Association also lists a set of data, subject to inventory pressure increase business scale expansion of the double impact of a general increase in all listed dealer group financing costs during the reporting period, eleven dealer groups listed Financing costs rose an average of 14.99%.
"It is not easy to find the money." Gang said, although its own brand to join the non-auto automobile mortgage certificate, "Vendors sometimes one week or every 10 days, will send down checks to see if the certificate and the car is not yet in. " But still there are many people will seek financing, the first automobile certificate mortgaged to the bank, then the inventory (auto) secondary or third mortgage to small banks and other financial companies and multiple collateral.
"The situation around me there. In fact, some dealers take the car to do the second mortgages when many financial firms know that the car dealer is not in the hands of the certificate, if the dealer does not pay, collateral car In fact, it is difficult to be disposed of. But the financial holding company in order to make money to gamble mentality. "Tang Ming told reporters. Under normal circumstances there is no certificate of the vehicle through the mortgage finance companies, dealers can get about 70% of the purchase price of the cars, but at the same time, interest frighteningly high. According to the reporter, and sometimes up to a fraction of its monthly interest rate. By sustaining high interest, dealers can temporarily relieve the lack of funds, but it seems clear in the soup, "It is because of the presence of non-compliant mortgages, accelerated the final death dealer."
Similarly, the non-compliance of many mortgage banks and financial institutions will undoubtedly bring some risks. Snow told the "First Financial Daily" reporters: "Since last year, our bank car loan default rate is gradually increasing, and this one, in addition to some private loans, there is a part of the loan for the dealer."
According to media reports, recently, the deputy director of the CBRC bureau 叶燕斐 prudential regulations in the "Third International Symposium on collateral management," revealed that this year repeat mortgage problem has extended to the field of automobile financing. Since there is no publicity, the car as a stock car dealers take bank financing, and then again to get the car inspected single pledge another bank financing; and making collateral regulation, because of collateral "possession" of that also controversial, and thus led to the Tao Feizhai so on.
"From this year, the overall situation, the emergence of financial problems will be more and more dealers." Tang Ming said. This means that risk or the whole industry chain will be further accumulation. In the banking sector, it seems, and if so, the bank threatens to further strengthen the auto financing business control, auto financing will also face greater challenges. In this context, with Wang Gang, represented by dealers for money, I am afraid it is difficult to tangle day end in the short term.

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