Financial institutions are eyeing auto parts companies

Recently, Wang Wei, general manager of the automotive business department of the Minsheng Banking Transportation Finance Department, said in an interview. "Banks not only solve medium and long-term capital expenditures such as capacity expansion for auto parts companies, but also help solve liquidity expenses such as order financing, purchase of raw materials, and discounted accounts receivable, and strive to open up the 'supply, production, sales and consumption' chain. Focused on providing services for the entire automotive industry chain."

In recent years, automotive finance has developed rapidly with the rapid development of the automotive industry. Not only auto manufacturers have set up auto finance companies, but also major commercial banks have established auto finance centers in auto finance fields such as Minsheng Bank, Bank of Communications, and Guangdong Development Bank, and are dedicated to vehicle companies, distributors, and auto parts companies. Provide financial services.

â–  Parts companies to explore new financing channels
The financing issue has always been a Kaner for the development of auto parts companies. Especially in recent years, parts and components companies have been under double pressure from price cuts by OEMs and rising prices of raw materials. Many parts and components companies are unable to invest in R&D, procurement and production due to lack of funds. This leads to missed development opportunities.

In order to solve the funding problem, the parts and components companies “have passed the eight immortals and their respective supernatural powers”. As early as 2010, Shandong Heavy Industry Group, Weichai Power and other capital increase Shantui Leasing Co., Ltd. (now renamed Tongxin Finance Leasing Co., Ltd.), and then involved in financial leasing business.

Luo Yufang, deputy general manager of the Industrial Equipment Division of Far East International Leasing Co., Ltd., said that the company currently has 1,500 customers, mainly small and medium-sized component companies other than foreign and state-owned enterprises, of which medium-sized component companies are mostly.

The deputy general manager of Yantai Wansite Co., Ltd. in charge of the company’s financing business told the reporter: “The company uses two methods of bank lending and equipment financing leasing, the latter is in cooperation with a famous domestic financial leasing company. The financial leasing is nearly two. The form of financing that comes into contact with the company in the beginning of the year has its own uniqueness. The company will have an expansion investment plan in the next step and will consider adopting a financial leasing approach."

Previously, the reporter also learned from relevant investigations that at present, auto parts companies are not relying solely on bank loans in financing, some have borrowed funds first from cooperative companies, some use private financing methods, and others rely on the strong support of shareholders. stand by. These diversified financing methods, which are based on the specific conditions of the company, enable the spare parts companies to activate the capital flow and seize the opportunity to achieve better development.

â–  Parts companies favored by banks

In recent years, auto parts companies have also grown rapidly with the development of the entire vehicle, and they have become increasingly professional and large-scale. This kind of good development has received extensive attention from the banking sector. It has expanded its business scope in auto finance and has provided financing support for parts and components companies.

A person in charge of a car seats component company in Chongqing told the reporter that it usually takes more than three months after the delivery of a complete vehicle factory for delivery. However, raw material purchases cannot be charged. Every month requires a certain amount of funds. Maintain production. At present, it is difficult for SME banks to borrow money, and it is hoped that banks can provide short-term lending services. “The auto parts solution is still relatively mature. From the perspective of auto parts companies, it is not only to provide corporate loan financing for plant construction, but also to do structured financing, integrate our leasing platform and put big production. Equipment is provided to companies in the form of financial leasing, and on the other hand, we also have order-based financing, if we think that the orders that the parts companies get are effective, they will provide financing in the ordering stage and let the enterprises take the money for financing. To buy raw materials, current products and services have involved many parts and components companies, including engines, transmissions, and tire companies, etc. This year, we will combine the company's business and personal business, consumer credit and financial leasing to further improve and open up the entire automobile industry. Industrial Supply Chain, said Wang Wei.

It is understood that not only Minsheng Bank has developed the financial business of auto parts companies, the Bank of Communications has provided financing support from the procurement, production and sales aspects according to the trade characteristics of the parts and components suppliers. Shenzhen Development Bank's business includes the financial services of vehicle manufacturers and distributors' inventory. With financing services, parts supply financing services and personal auto consumption credit services, Hua Xia Bank continues to deepen its cooperation with OEMs and auto parts companies through auto supply chain financing services.

â–  Coexistence of risks and benefits

Most auto parts companies are mainly SMEs. Financing them may bring certain risks, but risks and benefits coexist. Wang Wei told reporters that banks will conduct audits before providing financing services to enterprises. “The first is the basic analysis, including the company's level of technology, product quality control, the level of status within the industry, the brand it serves, and the development over the years. The status and stability of the marketing contract; followed by financial analysis, including the company's own asset-liability ratio, repayment ability, etc. In addition, the bank will also adopt post-lending management measures to prevent and solve problems in a timely manner to jointly solve problems.

In addition, commercial banks have a strong rival in the development of auto finance business - professional auto finance companies. Experts in the industry believe that financial companies and auto makers are a community of interests. Through bilateral cooperation, they can transfer manufacturing profits to the financial sector. This is a natural advantage that commercial banks cannot match. However, financial companies have more restrictions on their funds. Therefore, both parties must strengthen cooperation and complement each other in order to achieve a win-win situation.

Therefore, whether it is a commercial bank, a professional auto finance company or a finance leasing company, through an innovative model and product solutions, the bridge between the financial system and the auto parts industry will be erected to promote the parts companies to become even bigger. Strong direction development.