Guazi’s vehicle-credit business grows like a weed
26 Apr 2017
Guazi.com, China’s largest used-car platform and strategic partner of classifieds giant 58.com (NYSE: WUBA), began offering vehicle finance in-house in December 2016. Four months later, the company lifted the lid on the performance of its financing operation in the period. The report revealed Guazi has made impressive inroads into China’s atrophied vehicle loan market.
Guazi’s in-house financing is now available in 150 cities in China, and the value of loans applied for in a single month has already broken the 10-million RMB ($1.5 million U.S.) barrier.
Unlike Guazi’s competitor RenRenChe, which recently made a deal with Ping An Bank to extend vehicle credit to RenRenChe customers (see our report here), Guazi’s financing services are backed by its former parent company, and strategic investor 58.com. 58.com operates its own auto-financing service, called 58che Shangkuan, as part of its 58che.com platform. Alibaba (NYSE: BABA) offers a similar service through its Chemiaodai app.
Guazi estimates approximately 50 percent of the users of its platform are in need of some kind of loan, but only approximately 5 percent of used-vehicle purchases in China are currently financed by credit.
The Chinese auto-loan market is not likely to remain so undersupplied for long. The business and finance site 36kr.com suggested the possibility of an 85-percent expansion in the online auto financing sector by just 2018.