General Motors Acceptance Corporation (GMAC) claims its China business has achieved a major milestone by becoming the first foreign vehicle financing company to apply for a licence to conduct business in China.
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GMAC, a wholly owned subsidiary of General Motors, has agreed to form a joint venture with the Chinese partner Shanghai Automotive Group Finance Co. Ltd. (SAICFC). The partners filed their application after the China Banking Regulatory Commission announced the vehicle financing regulations and the implementation guidelines that essentially opens the door for licence applications.
“We see great market potentials in the vehicle finance segment in China,” said GMAC international operations head Richard Clout. “Globally vehicle manufacturers sell about 70% of their production through finance deals while in China it is a meagre 15 to 20%. We expect vehicle financing business will grow 60-80% in the coming years.”
GMAC will form with its partner SAICFC an automotive financial institution based in Shanghai. After the approval of the licence the joint venture will start to support the sale of Shanghai GM (SGM) vehicles – the joint venture between General Motors and Shanghai Automotive Industry Corporation Group (SAIC) – throughout their franchised dealer network and offer wholesale and retail finance products. GMAC and SAICFC will share their complementary business resources.
