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Innovation Of Automobile Finance In The New Situation: Product And Channel Innovation Parallel

2019/11/26 17:29:00 54

SituationAutomobileFinanceTransformationProductsChannels

The negative growth of the automobile market is still continuing. In 1-10 months, China's auto production and sales decreased by 10.4% and 9.7% respectively. And this year's auto market has not yet been explored, the price is still not stable, dealers are still changing the price. At the same time, the automobile market is also nurturing new forces -- the power of "new four modernizations".

In this new market situation, simple price reduction and matching can no longer stimulate consumers' desire to buy. Flexible financial products are becoming a powerful tool for manufacturers to promote sales and improve customer stickiness. Automobile finance is becoming a new engine for automobile consumption.

In November 20th, the 2019 China auto industry summit hosted by the twenty-first Century economic report was held in Guangzhou. Shen Jinjun, President of China Automobile Circulation Association, general manager of Shanghai Automotive Group Finance Co, general manager of Shanghai Automotive Group Finance Co, Xu Yulin, executive vice president of GAC Automotive Finance Limited, Jilin Automotive Finance Co., Ltd. president and chief executive officer Li Xia, founder and CEO Yao Junhong of grand search car, Chen Pengyun general manager of peanut car, and general manager of China Pacific Property Insurance Co automobile business department, Song Rong and Deputy Secretary General of China Automobile Circulation Association, have made in-depth discussions on how to innovate financial products according to market demand under the new normal situation of automobile market.

Lang Xuehong: under the new market background, from the perspective of sustainable development of dealers, what aspects of financial products and financial services support are needed?

Shen Jinjun: the main problem facing the auto market this year is how to tap the potential of consumption. How to face the market?

First, comparing the financial products of foreign and domestic financial institutions, we find that although our financial products are richer than before, their types are still relatively simple. We must have a wealth of products, but also have a real tailor-made, for different age groups, different professions, and even different gender consumer portrait, tailored exclusive, targeted financial products.

Second, when we tap the potential of consumption, it should be a multi-party supply, including mainframe factories, financial companies, consumers and distributors. Only under the joint efforts of all, can financial products really achieve sales and reach consumers in a wider range.

Third, used cars were regarded as assets rather than a commodity in the past. Maybe some automobile finance companies feel that this is a gap. Recently, the relevant government departments are also studying this matter, trying to make the second-hand car's property in the transaction process be restored and clear, and financial institutions can provide some second-hand vehicle financial products for the second-hand car market, which will also greatly promote the development of second-hand cars.

Lang Xuehong: in the face of the new market background, what are the innovations of the host company in the auto finance business?

Xu Yulin: this year's national policy and market environment are advocating one thing: finance must support the development of the real economy. As an automotive finance company of the main engine manufacturer, our first duty is to help the host plant complete the sales task. GAC, as a financial company of Guangzhou Automobile Group, must cooperate closely with the host plant to help them sell well and achieve sales targets. However, all 4S shops are small and medium-sized enterprises. Generally, financing is difficult and the interest is high. The first thing that auto financing companies should do is how to help them. Secondly, financial innovation is also crucial. We need to create some new ways to make customers experience better, and do well in risk control. In my opinion, auto finance companies should have this awareness and increase penetration with host plants to help them do better sales.

Shen Genwei: innovation is the core competitiveness of enterprises, and is the master key to solve all problems. How to innovate under strict supervision is the biggest challenge before us. Automobile finance is a sub industry of financial industry, and its innovation space is relatively small. Innovation needs to break through our imagination and develop the potential functions of existing products. We are trying to make new development of the existing products, and let it face more people and bring forth new vitality.

Take the long term consumer loans as an example. After the fourth quarter of 2018, the tax reduction provisions were issued, and some of the tax reduction beneficiaries could buy cars with new revenue from tax reduction. Based on this, we launched this year's "new version of the enhanced version of tax reduction list" with a loan term of 3-5 years. In this way, we first helped consumers who had too much money to buy a car because they had too much money in the month. Secondly, they helped the consumers who had only bought low priced cars because of monthly income restrictions could buy higher priced and more desirable cars, which was also consistent with the expectation of the car factory. Third, a longer term loan would enable dealers to get more profits. In short, this is a product that all participants benefit from. Before making the new promotion, it is only a single digit in the total loan proportion of SAIC finance, and has increased to 35% recently, the effect is very remarkable.

Li Xia: Kyrgyzstan set up auto finance for four years. The asset size is expected to be close to 30 billion by the end of this year. The total contract volume is expected to exceed 400 thousand this year, and it will still maintain an increase of 30% over last year. Innovation has great challenges for young companies like us, but it may also be a chance to overtake corners. Innovation has two important points: first, the team must first have the will to innovate; two, the team must have the ability to innovate. In terms of willingness, the company's strategic insight, including the use of financial technology, helps us to better understand the market changes and customer needs, which is to guide the team to cultivate innovation willingness; in terms of capabilities, the company through the horse racing mechanism to help employees use design thinking and agile delivery methods to practice innovation, to provide innovative atmosphere and soil.

In terms of product innovation, a good financial product should achieve win-win results. This year, we have launched a great product for Volvo's customers: integrating car prices, taxes, insurance, and extended insurance. It first helps dealers, with the help of repurchase, replacement, extension insurance and insurance, it can increase the touch up rate and return rate of 4S stores. For consumers, there is no need to worry about the residual value of vehicles after two or three years; at the same time, it can provide a very good second-hand car source for the host plant. In the traditional automobile industry, with the support of science and technology, innovation and innovation, there is still much room for improvement.

Lang Xuehong: what innovative practices have been made in the field of automotive financial services as a new retailer?

Yao Junhong: in the field of automobile consumption loan, there are regulations in the country. We must pay 20% down payment. Therefore, we launch the "car direct rent 1+3 mode": the first year rent, the first payment and the monthly rental rate are lower. After a year, we can choose to buy it all, buy it in installments, or rent it. Through this innovation, young towns and young people have changed four wheels to allow them to use automobiles in advance.

At the same time, the innovation of cooperation mode has been realized. The main engine factory has its own network, and the interests of the network must be protected. If the emerging channel makes the sale car and the original network conflict, the emerging channel can not be brought into the mainstream, and can not develop in the long run. Therefore, we divided the main channel of the main engine factory through the way of renting and buying. Obviously, the emerging channel sells the right to use, and only after a year can it get property rights. This way, the price system and the original 4S shop mode directly acquired property rights, the sales between the two have done a good separation.

On the other hand, after being supported by the host plant, the channel has been innovating. We hope to be more lightweight and closer to customers. Therefore, we have made innovations in the mode of opening stores. These stores have entered the business super community, and are also working with coffee shops and milk tea shops to sell cars. Young people in these places are more likely to gather. Coffee shops go to the Creative Park, drink a coffee inside, and get to know the car. We have done a lot of business work. During the "double eleven" national activities, we have done more than 5000 activities in various densely populated areas.

We hope that through these innovations, more people will be involved in sales, and the whole demand side can be pulled more fully.

Chen Pengyun: in this year's automobile market downturn, the sales of peanut good cars still keep 30% growth, which is inseparable from our innovative products and channel construction. The theme of innovation is "keeping in good order". The direct rental products themselves belong to innovative products in the whole automobile financial environment. Starting from the direct rental market in 2015, the customer group of peanut good cars has been positioned as 345 towns, and even town youth in the Midwest. Although these people do not have much deposits, the current and future income is stable. Direct rent is in a sense the advance of their consumption. And for many young people, low threshold and low down payment are acceptable.

The positioning of good peanut cars is the driver of auto financial products. We need to develop products and innovative products jointly with banks, auto finance and manufacturers, so as to be a retailer in the auto finance ecosystem, to contact and serve front-line customers. The key is that, as the core of the product, finance can change the relationship between us and our customers. The stickiness of service is crucial in the process of transformation. For example, insurance, at present, the loss rate of 4S shop is a big problem. But at the beginning of the product design, the peanut car was bound with the customer's subsequent insurance and insurance products, forming a strong correlation. So I think the direct rent is just the starting point, it changes the pure tenancy relationship, and the extension will have more room for service innovation.

Lang Xuehong: what aspects of innovation have been made from the perspective of insurance?

Song Rongzhong: the development of auto finance must not forget the original intention, serve the automobile sales, meet the needs of consumers. In the situation of new car sales moving from high speed growth to low growth or even negative growth, we should talk about the innovation of automobile finance, and we should make a subdivision of the market, whether it is a channel or a customer group. The participants in auto finance will be more professional in this niche market. At present, the participants of auto finance, whether they are providing automotive financial products or business operation processes, are basically standardized and integrated. There is little difference between them. If we can divide the customers and channels, which level will be done in the finance of the main engine factory, which level the bank will do, which level the financial leasing will do, which level of Internet finance will be able to meet the needs of customers at different levels. Because of different customers, different risks, different prices and different means of wind control, for example, town youth do not think much about the cost of capital, but white-collar workers who buy high-end cars in big cities still attach considerable importance to the cost of capital, which is different characteristics. Innovation should focus on the subdivision of customers, whether it is channels or products, and wind control.

As an important participant in automobile finance, insurance companies have the greatest advantage of increasing credit. In order to guard against financial risks, the bank has put forward very high demands on guarantee. Moreover, insurance companies have certain advantages in channels, personnel, customers, products, data and so on. They can provide various services for automobile finance licensees, and have the ability to jointly promote the development of the industry through innovation.

Lang Xuehong: finally, I would like to invite you to make a prospect for the development of auto finance.

Shen Jinjun: in the automotive market downturn or transformation period, auto finance is particularly important. We should tap the potential of consumption through finance, expand consumer demand, and help China's auto industry to achieve sustainable development.

Xu Yulin: under the premise of compliance, we should strengthen cooperation with the host plant, strengthen cooperation with distributors, and promote the development of the industry with "four modernizations" as a means. We should be optimistic about the automotive industry and optimistic about auto finance.

Shen Genwei: the era of negative growth in the automotive industry is the opportunity for us to realize the value of auto finance.

Li Xia: at the weekend, the Geely Group held a marathon in Guangzhou's "little waist waist" building, hoping that the auto finance could further integrate into the entire automobile ecosystem further.

Yao Junhong: I hope auto finance will be more popular in the future.

Chen Pengyun: I hope you can hug each other and keep warm. In the current situation, confidence is more valuable than gold, so we can build confidence together.

Song Rongzhong: I hope the insurance company can help the development of auto finance and make a modest contribution to the development of the whole automobile industry through auto finance.

 

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