SAIC Motor expands finance business with FOF founding
SAIC Motor Corporation Limited and Zhongyuan Asset Management Co Ltd announced on Sept 26 that they had co-established a company to conduct fund of funds (FOF) business.
Approximately six billion yuan ($925 million) will be invested in the company with SAIC Capital Co Ltd appointed as FOF manager.
The company was established to guide social capital investments into promising fields like high-end manufacturing, the military industry, medical care, environmentally friendly materials and finance. The two sides aim to drive technological breakthroughs with injections of capital, promotion of innovation and transformation, and an integrated finance and industry system.
SAIC Motor and Zhongyuan Asset Management also solidified plans to push auto development, with both parties agreeing to invest in new energy vehicles, high-end manufacturing and automobile parts.
SAIC Motor, the biggest auto enterprise in China, also aims to continue providing various financial services for customers, as evidenced by its new departments in automobile finance, corporate finance, equity investment, insurance sales, finance leases and overseas finance. By 2020, its assets under management of its financial sectors is expected to reach 300 billion yuan.
The equity investment business improved SAIC’s capital operations ability and helped it to deliver a development strategy focused on electrification, interconnection, intelligence and sharing. In recent years, SAIC Motor has also been operating as a venture capital fund focusing on vehicle integration, new energy, fuel-efficient and Internet vehicles; as well as a private equity investment fund primarily concerned with energy conservation and environmental protection, the promotion of the manufacturing industry, automotive electronics and the automotive aftermarket.
Founded in May 2011, SAIC Capital is a professional manager of investments and third-party assets; it establishes investment funds, and holds assets under management worth more than 25 billion yuan. By August 2017, the private equity and venture capital investment size of SAIC Capital exceeded 4.5 billion yuan.
The financial business helped promote sales of SAIC vehicles. In 2016, SAIC motor sold 6.49 million vehicles, a 10 percent year-on-year increase. By the end of 2016, SAIC Finance Co Ltd had provided financing services for more than 2,000 automobile dealers and released automobile consumption credit to 1.9 million people. SAIC-GMAC Automotive Finance Co Ltd has established retail credit partnerships with approximately 7,000 automobile dealers and provided automobile consumption credit services to more than 3.19 million customers.
SAIC Motor’s insurance business provides suitable personalized products and services for automobile owners. Insurance agency INSAIC has provided differentiated insurance solutions to more than 3,000 dealers. Auto insurance platform insaic.com was also launched, on which engine plants, insurance companies, automobile finance companies and dealers can interact with each other. SAIC Motor is aiming to develop better insurance products and services through analysis of driving behavior data.
Looking forward, SAIC Motor aims to continue growing into a comprehensive, globally competitive and influential auto enterprise providing travel services and products.