SEOUL, Sept 25 Hyundai Motor Group said on
Tuesday it had established an auto financing venture in China
with Chinese state automaker BAIC Group, that will help it take
advantage of growing interest in car loans in a market where
most consumers still pay with cash.
The move will also reduce the need for Hyundai Motor Co
and affiliate Kia Motors Corp to offer
cash discounts just to compete with rivals such as General
Motors Co which have been in auto financing in China
longer, a spokeswoman for the group's financing arm said.
Hyundai Motor, which entered the China market in partnership
with BAIC in 2002, was the country's third-biggest selling
automaker with an 8.9 percent share in the first half of this
year after General Motors and Volkswagen.
"Only 10 percent of car purchases are financed by loans in
China, a ratio that the industry estimates will triple by 2017,"
Ted Chung, CEO of Hyundai Capital, said in a statement.
Once the fastest growing automaker in China, limited
manufacturing capacity has slowed growth for Hyundai in the last
couple of years. But Hyundai recently began production at its
third China plant while Kia Motors plans to start production at
a third plant in 2014.
The venture, called Beijing Hyundai Auto Finance Co, will be
60 percent owned by the Hyundai Motor Group while BAIC Group
will hold 40 percent.