JAC Partners Anhui Government to Found Auto Leasing Joint Venture
Tang Shihua
DATE:  Jun 06 2018
/ SOURCE:  Yicai
JAC Partners Anhui Government to Found Auto Leasing Joint Venture JAC Partners Anhui Government to Found Auto Leasing Joint Venture

(Yicai Global) June 6 -- State-owned carmaker Anhui Jianghuai Automobile, also known as JAC Motors, plans to partner a government-run investment unit to set up a car leasing joint venture in its home province of Anhui.

Two JAC units penned a deal with Shenzhen Shenan Investment on June 4, the parent firm said in a statement yesterday. The venture will have registered capital of CNY1 billion (USD156 million) and the JAC subsidiaries will combine to hold a 49-percent stake.

The pair hope auto leasing, which is not yet prevalent in the world's largest auto market, will help JAC sell more cars. The practice can increase sales by offering competitive pricing, shortening consumers' car replacement cycles and boosting engagement with customers, according to a 2017 report by KPMG.

The report estimates that in 2016, China's vehicle lease penetration rate was about 2.5 percent, but believes this could shoot up to around 20 percent by 2026 thanks to a maturing used car market, the openness of millennial customers, and the forming of a residual value forecasting model.

The new firm aims to initially offer leases to the local market, but has plans to become a national leader, the statement added. As well as leasing, it will sell and maintain leased vehicles and offer other related services.

Editor: James Boynton

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Keywords:   Finance Lease,Automobile Assets,Jianghuai,Anhui