More financing options to own Mercedes

Updated: 2012-06-07 11:09

By Li Fangfang (China Daily)

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More financing options to own Mercedes

A Daimler AG Mercedes-Benz vehicle on display at the 2012 Beijing Auto Show in April. [Photo/China Daily] 

On Aug 1, Mercedes-Benz will become the first automaker in China to offer leasing options to private and commercial customers, making it easier to own a Mercedes-Benz.

The German luxury vehicle brand said on Wednesday that it has won government approval to establish Mercedes-Benz Leasing Co Ltd under its financial arm and to offer leasing as part of its various automotive financial services.

"This is another milestone in our development in China," said Ulrich Walker, chairman and CEO of Daimler Northeast Asia Ltd. "Our flexible and transparent leasing service gives Chinese consumers the opportunity to fulfill their dream of owning a Mercedes sooner and easier."

Brian D. Fulton, president and CEO of Mercedes-Benz Auto Finance Ltd, expressed similar thoughts.

"The strong momentum of the global auto market is right here in China," Fulton said. "Hence we feel the obligation to provide advanced financial services solutions here that exceed customer expectations. Customers can enjoy the driving pleasure of Mercedes-Benz earlier and enjoy smart options to use their cash more flexibly."

Leasing is a popular financial service that is widely available in the United States, Europe and other places. Among its advantages, leasing allows customers to make down payments that are flexible in size, guarantees the monthly payments they make will be transparent and gives them the option of trading in new vehicles at the end of a lease period.

"The tailor-made leasing solution allows the flexibility of including other upfront expenses such as insurance and purchase tax, thus maximizing the affordability of the leasing product," said Hermann Hauser, managing director of the newly established leasing company.

Mercedes-Benz has begun to train financial consultants at its dealerships so they can provide expert advice and consultation starting in August.

Hauser also said that Mercedes will constantly develop its financial services and will add new features to its leasing options as the market for that service develops.

In 2004, Shanghai General Motors Co Ltd became the first automaker to set up a financial arm in China. Since then, other large companies in that business have done the same in China, attempting to provide better service to the world's largest vehicle market.

Even so, the industry is still developing slowly in China compared with what it has done in Western countries. In the US, 85 percent of all vehicles are sold through financing; in Europe, the number is 70 percent.

In China, though, only 10 percent of vehicle buyers used financing to obtain a vehicle in 2011, a proportion that has held steady for years.

Analyst said financing is likely to become a much more popular means of buying automobiles in China in the coming years.

Jia Xinguang, an independent auto analyst in Beijing, also said the promotion of auto financing will be one of the best and most sustainable ways of spurring vehicle sales in China, which are now stagnating.