Auto financial service provider cheguo.com launched a one-stop platform on Monday, providing services ranging from second-hand car sales and car financing to auto insurance.
The Cheguo, literally known as "kingdom of cars" in Chinese, signed a cooperation agreement with Hundsun Technologies Inc, a shareholding company of Alibaba's Ant Financial Services Group, at the launch ceremony to upgrade its IT system.
The Cheguo aims to offer a financial services platform to car buyers, dealers and after-sales service providers, as well as auto insurance agents, said Tan Jianguo, chairman of Cheguo's parent company, Zhongan Financial Holding.
"The era of interconnectedness has enabled us to connect everything, including matching and managing various risks, and make use of our data reserve," said Guan Xiaolan, CEO of Hundsun Technology.
The financial software developer is in discussion with Cheguo for equity investment, Tan said. According to a person close to the matter, the two companies are still negotiating about the investment amount.
"China's car industry has been shifting from product-oriented to consumer driven, where the growth of capacity is no longer sustainable," said Shen Jinjun, secretary-general of China Automobile Dealers Association, adding that market participants should help cultivate the mobility of second-hand car transactions.
"China's penetration rate for auto financing is only between 20 and 30 percent, Shen said. "Car manufacturers tend to splurge at the sales side instead of offering subsidies to credit buyers and after-sales service providers to better retain customers."
The Cheguo will focus on the second-hand car market this year and provide risk-adjusted auto financing to the working class, Tan said. As the first step, the company said it would launch extended warranties to second-hand car buyers, enhancing the reliability of the car's quality.
Founded in Hangzhou, Zhejiang province, in 2015, the Zhejiang Cheguo Technology said it has about 3,000 dealer partners in more than 20 Chinese provinces.
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