Ssangyong Motor signs agreement with KB Capital for establishment of captive auto financing company
The new company to be named tentatively SY AUTO CAPITAL, to enter the auto financing market and start operations by January 2016
In light of the financial stabiltiy and a broad customer base of KB Capital, expect positive synergy effect
With the establishment of a captive auto financing company, SYMC can provide a one-stop service for vehicle purchasing and financing to expand sales
Ssangyong Motor (CEO Choi Johng-sik; www.smotor.com), part of the Mahindra Group, announced on September 14,2015,that the company has signed a definite agreement with KB Capital,an affiliated company of the KB Financial Group, for the establishment of a captive auto financing company.
The signing of the definite agreement took place at the Renaissance Hotel on September 11, 2015, after the Board of Directors' meeting was held.The signing ceremony was attended by Ssangyong Motor'sCEOChoi Johng-sik, KB Capital's CEO Park Ji-woo and other senior executives of the two companies.
The company, to be established by the end of this year, will be tentatively named "SY AUTO CAPITAL." Ssangyong Motor and KB Capital will invest a paid-in capital of20billion won and hold 51% and 49% of the stock of the new company respectively. The joint venture is expected to start operations in the auto financing market by January 2016.
The new auto financing company will provide optimal financing services to customers of Ssangyong vehicles. It will have a complete system that supports a one-stop service for purch a sing and financing either new or used vehicles and for maintaining and disposing of vehicles, etc.
With the support of a captive auto financing company, Ssangyong will be in a better position to offer good quality auto financing services to its customers and expects to increase its sales through diverse installment products and more effective promotions.
Earlier, Mahindra Finance, a subsidiary of the Mahindra Group, and KB Capital were in discussion for the establishment of a joint venture in the auto financing business, and the two companies signed a MOU on this subject matter inApril last year.
However, the three companies mutually agreed that it would be more efficient in terms of providing the auto financing services and managing the sales activities if Ssangyong,the auto maker,be came the contracting party to this agreement.Ssangyong signed the agreement with KB Capital for the establishment of an auto financing company.
Ssangyong is showing a sales growth for six consecutive years with the highest growth rate in the domestic automotive industry supported by the leading position of Tivoli in the small SUV market. It expects another growth momentum with the support of the new auto financing company that will provide captive auto financing services.
Choi Johng-sik, CEO of Ssangyong Motor, commented, "We highly valued KB Capital's financial stability and its broad customer base and decided to establish ajoint venture with KBCapital,"adding, "Once we have a captive auto financing company, we will be able to provide a one-stop service to our customers for both vehicle purchasing and financing that will help increase our sales."
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