Didi lays out auto finance
2018-10-08 17:37 Monday
Due to two recent murder cases involving contracted drivers of Didi (a ride-hailing platform in China), the company is facing a tidal wave of negative publicity. In order to salvage its sagging brand image, Didi has promised to tighten supervision of its drivers and beef up safety functions on the platform.
Meanwhile, Didi has begun to diversify within the auto finance industry, in the hope of achieving sustainable high future growth.
Auto finance market penetration in China is only 43%, just half of 86%) in the United States. China's car loan balance is expected to grow at a 15.7% CAGR from 2021. Attracted by the enormous room for growth , Didi has expanded its service profile in the auto finance market.
A notable development is Didi's partnership agreement with CANGO, a digital auto transaction platform in China, in July 2018. The two companies will collaborate on new and used car purchasing, simplifying auto insurance, and promoting new auto finance models.
Didi's ambitions in the auto finance industry started much earlier, as evidenced by its continual business and personnel adjustments. It established a Finance Department in February 2018, with the goal of providing a diverse range of services.
Following these preparations, Didi launched a series of financial services on its app, including car leasing, car hire purchasing and auto insurance. To support its nascent Finance Department, Didi began to aggressively recruit professionals with experience in related industries.
In order to obtain the permission to enter the finance market, Didi acquired 19PAY, a subsidiary payment company of GOHIGH corporation at 300 million RMB in 2017.
After its flurry of acquisitions, Didi has obtained approval from regulators to enter the payment, microfinance, and finance leasing businesses, setting the stage for a major expansion in the coming months and years.