Santander Consumer Finance has signed in Hefei, Anhui Province, an agreement with Chinese car manufacturer Anhui Jianghuai Automobile Co., Ltd (JAC) to create an independent company to provide auto financing in the Chinese market. Under the accord, Santander Consumer Finance and JAC will each have a 50% stake in the new company and will each name three members to the board of directors.
The consumer finance unit of Banco Santander will also nominate the General Manager (CEO) and other key management positions, thus contributing its expertise and experience in auto financing. JAC will nominate the company’s chairman and other management positions. The new company will have initial capital of 500 million yuan (about €58 million).
Under this agreement, the new company will provide financial products through JAC’s network of more than 1,000 dealerships taking advantage of Santander Consumer Finance’s expertise, with a presence in 14 countries. JAC is the seventh largest Chinese automaker, with sales of more than 400,000 vehicles in 2010. The new company can also finance other brands of passenger cars and is expected to enter into financing of commercial vehicles as well.
With this operation, which is conditioned upon the appropriate regulatory approvals (including China Banking Regulatory Commission), Santander Consumer Finance is entering the world’s largest automobile market, with more than 18 million vehicles sold during 2010 and a huge growth potential for the next decade.
Santander Consumer Finance currently finances the purchase of over 1.3 million vehicles a year in the markets where it operates. This Santander unit is present in 14 countries.
* This information has been provided by Grupo Santander.