Hyundai starts financing its automobile sales in ChinaHyundai Motor Group has set up an auto finance company in China to strengthen its sales in the world’s No. 1 car market, group officials said yesterday.
Beijing Hyundai Auto Finance, a joint venture between Hyundai Motor Group and Beijing Automotive Industry Holding, is capitalized at 500 million yuan ($79 million), according to the officials.
Hyundai Motor Group, which encompasses Hyundai Motor and Kia Motors, holds a 60 percent stake in the financing venture, while the rest is owned by Beijing Automotive Industry.
The Korean automobile giant hopes the new entity will help tap the growing demand from younger generations of Chinese who are more willing to borrow money to buy cars than their parents.
“We are confident about our growth perspectives since only 10 percent of car purchases are financed by loans in China, a ratio that the industry estimates will triple by 2017,” said Ted Chung, the CEO of Seoul’s Hyundai Capital Services, the financial unit of the automobile group.
“Having a captive finance company will benefit Hyundai Motor Group in its future efforts to gain a market share in the world’s largest car market.”
The joint venture’s capability in China will be supported by Beijing Automotive Industry’s extensive network and knowledge on China’s domestic market, the officials said.