This article is from the public number:Euro EO (ID: EO-AUTO), author: Zeng music, edit: Yu Zhe, title figure from: vision China
After Yi Xin, You Xin, and Can Gu, another Internet auto finance company sprinted to the stock market. Unlike other rivals, this company only specializes inNote on the used car financial market.
October 31, China’s second-hand car financial service platform, Meri Car Finance, submitted a prospectus and plans to land on the New York Stock Exchange.
Merly Finance is a wholly-owned subsidiary of Murray Financial, an Internet consumer finance platform, which entered the market in 2014. As a used car financial service platform, the platform itself does not have the funds, nor the transaction link, but “connects institutions and consumers, and facilitates financial institutions to provide loans for used car trading customers.”
The prospectus shows that Murray Finance’s total revenue in 2018 was 1.656 billion yuan, a year-on-year increase of 91.1% and a net profit of 319 million yuan. In the first half of 2019, the company’s financial data went further: total revenue increased by 38.6% year-on-year, and net profit increased by 274.2%.
Can Meri Finance, which is impacting IPOs with large-scale profitability, become the “first share of China’s used car finance”?
Million Finance / Murray Financials official website
With the birth of many listed companies, the used car financial market is changing from “blue ocean” to “red sea”. Many backward enterprises have been eliminated and market concentration is getting higher and higher.
In recent years, with the gradual liberalization of the previous policies of used cars in various provinces and cities, the Chinese used car market has developed rapidly. The national second-hand car transaction volume broke through the 10 million mark for the first time in 2016, and maintained double-digit year-on-year growth in the next two years.
In 2019, when new car sales fell sharply, used car sales continued to show growth. The latest data of the Association shows that from January to September 2019, the cumulative transaction volume of used cars in the country was 10.085 million, an increase of 4.32%. In the same period, the cumulative transaction amount of used cars in the country was 667.05 billion yuan, a year-on-year increase of 5.79%.
At the same time that the used car market in the country is developing rapidly, the financial penetration rate of this market is only 10%-20%. In contrast, the average penetration rate of automobile consumption finance in major developed countries has exceeded 70%, and the penetration rate of automobile finance in the United Kingdom and the United States is as high as 90% and 86%.
The Chinese used car financial market is still in the blue ocean.
According to analyst firm Frost & Sullivan, as the proportion of used car consumption in total car consumption increases, it is expected that by 2030, the market size of China’s used car auto market will reach 704.3 billion yuan.
01 Guild Wars
Maybe it is a huge imagination of the used car financial market, a large number of players have poured in.
The current players in the used car financial market are mainly divided into five categories: banking institutions represented by Ping An Bank and Industrial and Commercial Bank; mainframe financial companies represented by the above-mentioned automobile GM and BMW Auto Finance; represented by Zhejiang Anxin The credit guarantee company; the financial leasing company represented by Pioneer Taimeng, Jianyuan Capital and Shanbang Leasing; the Internet car trading platform based on the large-selling car, Can Gu, and melon seeds.
In addition, along with the development of the used car financial market, a number of used car testing and evaluation agencies represented by the car 300 have emerged.
From the business model point of view, the players in the used car financial market mostly rely on financial leasing, rent purchase, direct rent, car loan, and inventory financing mode.
At present, second-hand car transactions are mainly based on offline channels, and transactions are conducted through independent dealers. Frost & Sullivan data shows that there are 100,000 used car dealers in China, and second-hand car transactions are concentrated in non-first-tier cities.
Under the non-standard market of used car fragmentation, there have been many “new styles” in the used car financial market.
Dars has launched the second-hand car brand “Da Shou Car Home Selection”. Li Zhiyuan, co-founder and COO of Daxu, has revealed that “Da Shoujia Home Choice” is signing cooperation with banks to customize financial products for used cars.
On the other hand, players’ ability to refine their operations based on data and technology is becoming more prominent. The second-hand vehicle inspection and evaluation agency car 300 and the new car retail peanut good car reached a cooperation to improve the wind control model and evaluation system.
Xi Wei, founder and CEO of Car 300, said in an interview with Yiou Automobile, “The core of the third-party service organization is ‘seeing the effect’, especially the ‘wind control’ part. The risk control ability can be used Past data to test existing capabilities, this is a technical job.”
Because the usage of each car is different, the used car has the characteristics of “one car, one price and one price”. Traditional artificial wind control is inefficient and susceptible to moral hazard. In some business front-ends, there is a situation in which sales assistance C-ends the user data, and there may be problems in artificially utilizing the characteristics of the second-hand vehicle disposal price range. At present, the entire used car financial market has no small challenges in terms of risk control.
Today, the war of used car finance has become more and more fierce. Players need to add weights in terms of channels, risk control and efficiency to enhance their competitiveness in the fierce battle.
Machine used car / Yiou car
02 Dilemma
Because of the huge development space, the used car market is intricate.
How to reach a large number of dispersed dealers has become a top priority for all used car finance companies.
The offline used car trading market is conducive to minimizing the transaction costs of each dealer. In comparison, the used car e-commerce platform has higher customer cost and is much less efficient than the used car trading market. Used cars are non-standard products, and their prices are closely related to various factors such as brand, model, car condition and region. Compared with the pricing of trading platforms, the prices given by local dealers based on their experience are often more informative. Therefore, “grabbing dealer resources” has become an important part of the used car financial market.
Compared with the United States, China’s second-hand car market is not yet mature, lacking certification system and credit information mechanism, making the “non-standardization” characteristics of used cars outstanding, one car, one car, one price, one land and one price. The used car financial market is the norm.
As the second-hand car financial market is not standardized, the companies are mixed, and the quality of employees is uneven, the “routing loan” problem has also emerged.
In April 2019, the “Mercedes-Benz female car owner cried to defend rights” incident pushed the term “financial service fee” to the public’s view. 4S shop induced consumption, bundled sales and other phenomena have been exposed. On September 11, Mercedes-Benz Auto Finance Co., Ltd. was finely punished by the Beijing Banking Insurance Regulatory Bureau for 800,000 yuan due to “there is a serious shortage of management of outsourcing activities.”
At present, the consumption of used car financial market is mainly concentrated in the traditional used car market, and “inventory financing” will become a stable source of enterprise development.
The original BMW Auto Finance (China) Sales Vice President, now the Executive Vice President of the No. 1 Auto Market, Yang Baofeng said to Yiou Automobile, “in stock As an example of financing, the financing difficulties and financing of small and medium-sized enterprises have always been a major bottleneck restricting the development of enterprises. Compared with the dealers authorized by the OEMs, second-hand car dealers lack the support of inventory financing. Some banking institutions began to try B+. C-linked products are exchanged for C-side financial penetration for B-side inventory financing support.Among them, ‘wind control’ has become an important factor.
With the rapid development of China’s used car market, the problem of used car integrity has become more prominent. The asymmetric information in the used car market, the malicious inducement of a few unscrupulous people, the concealment of car owners or the misreporting of car conditions have occurred. Faced with this dilemma, a number of third-party testing and evaluation agencies have emerged.
However, the emergence of used car history maintenance records, opaque information such as illegal records, etc., makes “real reflection of used car conditions” a major problem. Based on this, some used car testing and evaluation institutions are facing the double test of difficult profits and difficult financing.
In this regard, Xu Wei believes that “the second-hand vehicle inspection and evaluation agency business is difficult to land, commercial financing is difficult, the core problem lies in the market demand. It is difficult to form a large-scale effect on the C side; at the B end, the car dealers basically bring their own Detection capabilities, unless there is a better and more efficient detection solution to break through this bottleneck.”
In the used car financial market, it is not easy for all kinds of players to eat this “big cake”.
03 Breakout
The down market, the second-hand car financial market is also facing industry reshuffle.
For a long time in the past, financial institutions such as banks and auto finance companies have been increasing their spending on new car finances, but they have been involved in second-hand car finance.
In recent years, auto finance is a blue ocean in China, but to a certain extent, it has entered a red sea. The competition is very fierce. Not only many OEMs are reshuffling, but auto finance is also facing a reshuffle. Said Yang Baofeng.
In the used car financial market, compared with the head players, small and medium-sized players are not only in the process of trading, lending speed to the giants, but also in the flow, stock advantages, scale is in a weak position. As the industry shuffles, market resources and users gradually tilt toward the head platform, making it difficult for small and medium-sized players to break through.
A lot of people in the industry believe that the stronger the strong, the survival of the fittest will become the development trend of the industry, the small and medium-sized car dealers tend to reduce, the head effect is more and more prominent.
Changgu CFO Zhang Yongyi believes that “the head effect of the auto finance platform will be more prominent in the future, and the stronger the stronger. In the stock market, this is a very important feature of industrial integration.”