Research on Credit Risk Management of Auto Finance - A Case Study of H Auto Finance Company

With the development of China in recent years, the automobile industry is an important support of economic growth. In the entire automotive industry chain, the automobile finance could make up nearly 20 % its profits. Automobile finance not only creates significant profit for auto companies, but also boosts Chinese credit consumption and ease borrowers’credit pressure. At the end of the 2019, there were 25 automobile finances established in China which include local automobile finance and sino-foreign joint venture. The accelerated development of auto financing companies gradually eroded the market share of commercial Banks, therefore automobile finance is attracted much attention. First of all, this essay introduces the main risks faced by automobile finance. Secondly, the essay focuses on the whole approval process of the A automobile finance. It analyzes every potential risk and finds out reasons in pre-loan management, credit, post-lending management deeply as well as strengths in these procedure. The last part of the essay summarized the A credit controlling in order to provide the measures how to strength the capibility of controlling of credit risk, operation risk and market risk in current laws environment. Local automobile finances could manage the risks in an reasonable and acceptable range, so these company could enhance competitiveness.