Geely Automobile Holdings Limited and BNP Paribas Personal Finance confirmed today that they have received approval from the China Banking Regulatory Commission (CBRC) to start the set-up of a joint venture company engaging in auto financing activities in the People’s Republic of China (PRC). This is a key milestone for the launch of the joint venture in compliance with the relevant PRC laws and regulations within the next six months.
Upon completion of the preparation, the joint venture company will officially apply for commencement of operations in accordance with the applicable requirements and procedures in the PRC. The joint venture company aims to provide auto financing products and services in the PRC, including wholesale financing solutions to auto dealers to finance the purchase of cars as well as retail financing solutions to end-customers.
It is expected that the wholesale financing activity will be launched as soon as the operations commencement approval is received from the CBRC and applicable regulatory authorities in the PRC. The retail financing activity will follow by end-2015.
According to the “Observatoire Cetelem de l’Automobile 2015” (1), the People’s Republic of China is now the world’s largest automotive market. With almost 21 million new passenger vehicles registered in 2013, the Chinese market has eclipsed the American market (2) and is the key driver behind global automotive consumption.
Geely Auto’s Executive Director, Mr. AN Cong Hui, commented, “We are pleased that the auto financing project has been progressing smoothly. I believe this new partnership with BNP Paribas Personal Finance will help create more value to our dealers and end-customers in a professional and efficient way. By leveraging the expertise from our partner, we will be able to build an edge and increase sales volume in the market. Geely Auto will allocate the best resources to ensure the success of the joint venture.”
Chairman and CEO of BNP Paribas Personal Finance, Mr. Thierry Laborde, said, “We are extremely happy to meet the timetable we have established with Geely Auto and to see the first step in concretizing the joint venture. We are keen to support the development of the leading growth market in the world for the automobile industry. Not only is China’s car ownership rate per 1,000 inhabitants rising 13% a year in average, but the country shall also double its world market share by 2020 (3). We look forward to working together with Geely Auto in order to bring auto financing services to the Chinese customers.”
Chief Executive Officer of BNP Paribas Asia Pacific, Mr. Eric Raynaud, said: “BNP Paribas is dedicated to growing its business in China, which is a key growth market in its Asia Pacific Development Plan. We are pleased to set up the joint venture with Geely Auto, which will further boost BNP Paribas’ franchise and client offering in the market. BNP Paribas has been active in forming strategic alliances with leading local partners in the Asia Pacific region for the synergy of combining our global expertise and their local insights. We believe this is a key to success to drive our business growth in Asia Pacific in the coming years”.
(1) The Observatoire Cetelem de l'Automobile 2015 - GLOBAL CAR MARKET is a yearly international survey of consumers dedicated to the automotive sector, commissioned by BNP Paribas Personal Finance
(2) Observatoire Cetelem de l'Automobile 2015 - GLOBAL CAR MARKET - Source: BIPE (economic information and prospection Bureau) according to OICA (International organization of Motor Vehicle Manufactures) and Manufacturers' federations
(3) Observatoire Cetelem de l'Automobile 2015 - GLOBAL CAR MARKET - Source: BIPE based on OICA, manufacturers' federations, BIPE estimates and forecasts)
Geely Auto is an indigenous automobile manufacturer in China with its headquarter based in Hangzhou, Zhejiang Province, China, focusing on sales of passenger vehicles and manufacturing and sales of automobile parts and components. Founded in 1997, Geely Auto and its subsidiaries (“Geely Auto Group”) employed approximately 18,000 employees and operated 8 domestic manufacturing plants with vehicles being produced under the “Geely” brand as of 31 December 2013. Geely Auto vehicles were sold through a domestic distribution network comprised a total of 838 shops, including 723 4S dealer shops and 115 exclusive franchisee stores, in China as at 31 December 2013 and through sales and service outlets in overseas markets like Russia, Egypt, Belarus, Iran and Ukraine, Brazil, Uruguay and Saudi Arabia, etc.. Geely Auto is listed on the main board of The Stock Exchange of Hong Kong Limited, and Geely Auto Group reported annual turnover of RMB28.71 billion from sales of 549,468 units of vehicles and net profit attributable to shareholders of the Company of RMB2.66 billion in 2013. In 2014, Geely Auto Group obtained 2.1% market share in China’s passenger vehicles market and sold 417,851 units of vehicles. The parent company of Geely Auto is Zhejiang Geely Holding Group Company Limited (“Geely Holding”), which is also the parent company of Volvo Car Corporation in Sweden and the London Taxi Company in Britain. Mr. LI Shufu, Chairman of the Board of Directors and Executive Director of Geely Auto, is the founder and controlling shareholder of Geely Auto.
BNP Paribas Personal Finance is the leader in France and in Europe for personal loans via its activities in consumer credit and mortgage lending. A 100% subsidiary of the BNP Paribas Group, BNP Paribas Personal Finance has nearly 20,000 employees and operates in about 30 countries.
Under brands including Cetelem, AlphaCredit in Belgium, Findomestic in Italy, Cofinoga, and the company offers a full range of personal credit products at points of sale and car dealerships and directly to consumers through its customer relations centres and Internet. BNP Paribas Personal Finance has added an insurance and savings offer for its clients in Bulgaria, France, Germany, and Italy.
BNP Paribas Personal Finance has developed an active partnership strategy with retailers, manufacturers and automotive retailers, web merchants and financial institutions (banks and insurance companies), based on its experience with marketing credit offers and integrated services tailored to partners’ business and commercial objectives. It is also a leading player in the field of responsible lending and financial education.
BNP Paribas' presence in China dates back to 1860 when it opened its first office in Shanghai. Currently with nearly 500 staff based in China, BNP Paribas provides banking, financing and advisory services via its Corporate & Institutional Banking and Investment Solutions divisions. Through other vehicles in China, BNP Paribas is also engaged in corporate advisory and overseas equity fund raising. Clients include local and overseas corporations and financial institutions, institutional investors and high net worth clients.
BNP Paribas enjoys leading positions in energy and commodity finance, structured finance, fixed income, and transaction banking, and is an active player in cross border RMB banking business. With both RMB and foreign currency capabilities in China, and leveraging on BNP Paribas' global platform in Asia Pacific, Europe and the Americas, the Bank provides specialized financing solutions to our clients, both in China and overseas.
BNP Paribas is also present in retail banking through a strategic partnership with Bank of Nanjing, in which it holds a 16.2% stake (as of end-2014). It also has a 49% share in HFT Investment Management, an asset management joint venture established with Haitong Securities in 2003. BNP Paribas Cardif is also present in China through a 50:50 life insurance joint venture with Bank of Beijing.
Worldwide, BNP Paribas has a presence in 75 countries with more than 180,000 employees. It ranks highly in its three core activities: Retail Banking, Corporate & Institutional Banking and Investment Solutions. In Asia Pacific, BNP Paribas is one of the best-positioned international financial institutions with an uninterrupted presence since 1860. Currently with over 9,000 employees* and a presence in 14 markets, BNP Paribas is constantly expanding its footprint in the region to provide its clients with product and service solutions tailored to their specific needs.
*Corporate & Institutional Banking and Investment Solutions divisions (excluding partnerships)