On December 8, 2010, a grand opening ceremony was held for Sany Auto Finance Co., Ltd. (hereinafter referred as “Sany Finance”) in Changsha. This is the only automobile finance company in the construction machinery industry in China, and the second Chinese automobile finance company in China. The registered capital of the newly-established Sany Finance is 800 million RMB yuan, and its controlling shareholder is Sany Group Co., Ltd.. Yayu Xiao, Deputy Director of Standing Committee of the People's Congress of Hunan Province, Yongwen Han, Vice Governor of Hunan Province, and leaders from Banking Regulatory Commission of Hunan Province, Finance and Securities Office of Hunan Province, Industrial and Commercial Bureau of Hunan Province were present at the ceremony.
Sany Finance mainly provides financial services to satisfy needs from the construction machinery industry, and provides special automobile financial loans, leasing services and one-stop financial service solutions to customers. By 2015, all finance business within Sany Group will be taken charge by the financial business unit. At that time, the finance assets under the control of the financial business unit is expected to exceed 100 billion RMB yuan. According to insiders, the establishment of Sany Finance is an important milestone in Sany Group’s development, marking its formal entry into the finance industry. Sany will realize coherent fusion of its industrial capital with financial capital via its own financial business platform.
■A boost to its main business and the going-global strategy
It is reported that by means of risk control, finance operations and the informationization drive, Sany Finance will boost the development of Sany’s main business. The future layouts of the Sany’s financial business and its industrial business will be interdependent and give a fresh impetus to Sany on its global expansion course.
At the opening ceremony, President of Sany Group and Chairman of Sany Finance Xiuguo Tang said, the newly-founded Sany Auto Finance Co., Ltd. will gradually involve and integrate all financial business within Sany Group, and penetrate its products and services to all sections of its industrial chains and value chains. Its business will cover a wide variety including loans, leases, insurance, trust and so on, to provide integral one-stop solutions to customers and form unique financial products, services and operation modes in its international markets.
It is learned that by 2011, Sany Finance will provide mortgage loans, financial leasing, inventory financing services etc. for distributors in the domestic market, and start to provide loans for distributors to build exhibiting halls, loans for second-hand equipment and spare parts, as well as intermediary business such as dealership and consultancy.
“It has become a tendency today to provide overall financial services in the construction machinery industry. Construction machines mostly cost millions or tens of millions yuan. Therefore, there are huge demands for financial services. Customers can cooperate with financial companies for long terms to alleviate their financial pressure, thus to expand the consumption of construction machines to larger scales.” Xiuguo Tang said.
According to Xiuguo Tang, some construction machinery makers, such as Caterpillar, Manitowoc, Terex and Komatsu, have developed financial services taking half of their whole business. Financial services in the Chinese construction machinery industry is still at the startup stage. Sany as a leading enterprise in the industry, is the first to integrate industrial capital and financial capital, foreseeing a broad prospect of expansion in future.
More importantly, the founding of Sany Finance will push Sany Group to set up a globally-based network for bringing in, cultivating and keeping professionals. “By 2015, Sany Finance will have more than 3000 employees and become an important base to train talents in the fields of finance, law and so on. It will help the group to educate a lot of medium and high level management persons.” Xiuguo Tang said.
■An important source of profits
An analyst once said: “Judging from the profit structure, General Motors is more like a bank, rather than a car maker.” These words well demonstrate the significant role played by automobile financing in the manufacturing industry. It also indicated the huge potential of financial services in the present economic environment.
In fact, automobile financing is the most profitable part in the industrial chain of the industry. The returns of automobile companies account for 30% - 50% of that of whole machines in the international market. More than 90% of cars sold in the U.S. were paid by loans, whereas in China, it’s only 10% - 20%.
According to Xiuguo Tang, Sany Finance will become an important business and important profit source of Sany Group. We hope to spread our financial business to all retail trust business, wholesale trust business and other business to build up a “supermarket” for financial services. As is predicted, by 2015, Sany Finance will take control of all financial assets in the group. Suppose self-support business and agent service both account for 50%, from 2011 to 2015, the finance company is expected to bring a net profit of 5.5 billion RMB yuan.
“Many industrial empires are at the same time financial empires. They are extremely capable of capital operation. Let’s take Mitsubishi of Japan for example. Mitsubishi is not only name of a Corporation. There is a bank by the name of Mitsubishi. Another example, Caterpillar from America makes profits not only by selling machines, but also by providing other services relating to its main business, especially finance.” President of Sany Heavy Industry Wenbo Xiang told reporters.
■Supplementary to Sany’s global deployment of resources
Reportedly, Sany will start its financial industry in China and gradually expand it to America, Germany, India, Brazil and Hong Kong and so on. The finance business in the future will give more support to the company and will be managed and coordinated in uniform globally.
The mid-term objective of Sany Group is for its sales revenue to hit 100 billion RMB yuan by 2012 and 300 billion RMB yuan by 2015; and for the company to be listed among the world’s top 500 enterprises. Supported by the rich industrial capital and industrial advantage of Sany Group, Sany Finance will give an impetus to the continuous and sound development of Sany Group in its main industry. In the meantime, Sany Finance will realize a leapfrog of development through this financial platform. The integration of industry and finance may serve as a shortcut for the realization of Sany’s vision.
(Translated by Xiaoyu Qi, Revised by Zhendong Du)
Yayu Xiao, Deputy Director of the Standing Committee of the People's Congress of Hunan Province, and Yongwen Han, Vice Governor of Hunan Province at the opening ceremony
Contract Signing Ceremony
