(Yicai Global) Jan. 4 -- Zotye Auto, one of Ford Motor's Chinese partners, will form an auto finance joint venture with a local bank to explore the emerging market and boost its sales.
Yongkang, Zhejiang province-based Zotye and Jiangsu province-based Jiangnan Rural Commercial Bank signed an investment agreement for the JV yesterday, the private auto parts and vehicle maker said in a statement the same day.
Zotye will invest CNY1.2 billion (USD175 million) and hold an 80 percent stake of the JV while Jiangnan Rural Commercial Bank will inject CNY300 million (USD44 million) to take the rest, per the statement.
The JV will focus on the auto consumption business in its early phase, providing loans for car retailers and car and spare parts dealers. Credit facilities to retailers will mainly be introduced first within Zotye's own dealer system and expanded to other brand models upon maturity, the statement said.
The JV will gradually extend its tendrils into financial leasing and other emerging sectors after its operations and profitability reach a certain scale, the statement added.
Zotye and Ford formed a JV in 2017 to produce 100,000 battery electric vehicles a year, with each taking a 50 percent stake.
Zotye also set up another 50-50 JV last year with another unit of the Dearborn, Michigan-based US auto giant -- Ford Smart Mobility -- to provide intelligent and customized BEV travel solutions for online car hailing firms and drivers.
Editor: Ben Armour