BYD Plans to Increase Capital of Auto Finance Subsidiary
According to an announcement released Thursday by Shenzhen-based automaker BYD, the company and its holding subsidiary BYD Precision Manufacturing plan to increase capital contributions to BYD Auto Finance by 4.62 billion yuan ($695 million) and 180 million yuan respectively.
Bank of Xi’an Co., Ltd., another existing shareholder of BYD Auto Finance, also plans to increase capital by 1.2 billion yuan in cash. After the moves are complete, BYD, BYD Precision Manufacturing and Bank of Xi’an Co., Ltd. will directly hold 77%, 3% and 20% equity in BYD Auto Finance respectively.
BYD Auto Finance was established in February 2015, seeking to provide loan services to customers who purchase BYD vehicles. By the end of the third quarter of 2021, BYD Auto Finance had issued loans totaling 53.537 billion yuan, most of which were aimed at individual customers. In the first three quarters of 2021, BYD Auto Finance’s operating income was 390 million yuan, while its net profit reached 91.7 million yuan.
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With rising demand from BYD consumers, it is expected that the number of loans issued by BYD Auto Finance will increase rapidly in 2022. This capital increase will help to enhance the market competitiveness and loan volume of BYD Auto Finance, which will also have a positive impact on BYD’s auto sales.