At the end of 2017, a large number of auto finance platforms began to fail.

By the first half of 2018, this trend has grown sharply.

According to statistics, the number of P2P platforms involved in car loan business has been reduced from 1741 to 859, with more than half of the casualties.

The car loan business is only a small part of the auto finance plate.

First, bank loans, a large number of small platform funds cut off;

Followed by the heavy pressure of supervision, interest rates, collections, etc. have all set stringent standards, and even started the industry clean-up, public security departments involved;

The industry's own problems have also begun to erupt - access to customers is difficult, wind control is difficult, and the cost of offline operations is expensive.

"The car loan industry has been hard to make profit," said Peng Tan, a senior car loan practitioner.

Why is the fire-fighting industry so hot and why it is so fast?

01 closed tide

In 2017, the most successful of all financial technology is in two areas: cash loans and auto finance.

In one year, the industry is full of exciting news.

Huge financing, listing, and surging players, in the heyday, involved 1,741 companies in car loan business.

Then, within a year, the industry was swept by the collapse.

According to the incomplete statistics of the online loan home, as of the beginning of April of 2018, only 859 P2P platforms involved in car loan business were operating.

51% of the P2P car loan platform closed down.

"Now our task is to chase cars." Cheng Siye, head of a car loan company in Henan, said that their team has basically been dissolved, leaving only the post-credit collection department.

In the industry, many small platforms use this tragic approach to leave the market: only to collect, and other departments dictate.

The industry’s earliest tightening signal began with bank loans.

"Last year, after the cash loan was tightened, a lot of money was crowded out and nowhere to go, but car loans became a good carrier." said Zhang Xin, CEO of a car loan platform.

And car loan companies, completely assume a "help loan" role.

"Bottom agreement with the bank or trust, the bank is also happy, manpower, risk control, collection, the equivalent of all outsourcing, sit back to collect money." Zhang Xin said, so from last year, a large number of small and medium-sized banks, city commercial banks huge Funds have entered the field of car loans.

In fact, except for a part of personal loans from P2P, the vast majority of funds derived from traditional financial institutions such as banks and trusts are included in the car loan platform.

In the eyes of the bank, car loans are absolutely good assets.

Anyway, there was a mortgage on the car, and the monk ran away and couldn't run off the temple—it was a big deal to auction the car. The possibility of losing money was not high anyway.

Then, starting from this year, under the background of the country’s emphasis on “de-leveraging and risk removal”, the help-lending model was halted, and the funds for the entire car loan industry faced withdrawal.

"A lot of banks do not dare to give money to the car loan platform and begin to withdraw funds completely." Zhang Xin said that their platform once used a small city commercial bank funds but was suddenly stopped.

After the shutdown, they have tried to use P2P platform funds, but because the cost is too high, "it can't cover the cost of operation."

Then, the supervision of collection also came, like a storm.

On April 26th, 2018, in order to regulate overdue debt collection of Internet finance and protect the legitimate rights and interests of all parties, the China Internet Finance Association issued the “Convention on the Self-regulation of Overdue Debts for Internet Finance (Trial)”.

This means that violence collection or improper collection is defined as: illegal.

In the car loan industry, collection is the industry's "tumor."

After many users mortgage the car, they will mortgage the car again to other companies in exchange for a loan. “Two arrivals” and “three arrivals” have become the norm in the industry.

The car is the most central part of this economic relationship. Whoever controls the car will have the initiative.

Therefore, it has become the “main means” for the industry to collect cars, chase cars, and regain the initiative.

In many regions in China, the collection of car loans is very concentrated.

In Henan, Guangdong, and Northeast China, there have been violent incidents caused by “violence collection”.

Therefore, in the recent month, there have been a number of public security “blackout operations”, all of which have included the area of ​​car loans as a key area of ​​attack.

In Guangdong and Zhengzhou, the employees of several car loan companies were taken away.

"This is also a fatal blow to the industry." Zhang Xin said, "The collection is now the company's only department, and now even the collection did not dare to push, the user once the police, the police involved, is now particularly passive."

Then, in the face of the difficulties of cutting off the flow, leaving the market, but no reminder.

Many small companies in the industry are trapped in endless pain and unable to move forward or exit.

02 Industry sleepy

In addition to being forced out of auto finance players, there are still a number of active exits.

The profits of the entire car loan industry are extremely thin.

At present, the capital cost of car loan business is about 12%, but the interest rate for user loans is to be controlled at 36% or even below 24%.

This profit is almost always used to cover operating costs.

In fact, car loan business is not like Internet companies.

Players basically use the offline mode to build offline stores, because regardless of the car's mortgage, pledge, you need to see the car status on the scene;

These procedures need to go to the local vehicle management office;

If the car is pledged, a parking lot will be needed.

This determines that the car loan industry is a mode that focuses on manpower and heavy lines.

“We have an offline store, the rent plus the labor cost of 30 people, a month's cost is 260,000, and the store has to release more than 1.5 million to cover the cost of 260,000,” said Peng Tan.

People in the industry have converted it. A medium-sized platform, put 4 billion, will need to maintain close to 100 salesmen, and the cost is very high.

At present, the industry's cost of obtaining customers and the difficulty of obtaining passengers are increasing.

“Each channel will push customers, and these channels need to go back to the three points of loan finance, but also to employees 2-4 points, the entire cost of obtaining customers, up to 5-7 points of loan finance.” Peng Tan Said.

Although the car loan industry is trillion scale, the actual penetration rate is extremely low.

At present, the annual amount of new loans for the auto loan industry is only 30-400 billion yuan, and the penetration rate is only 7%.

“The low penetration indicates that there is a huge market space. It also shows that the perception of the industry is far from enough and the cost of education is high,” said Peng Tan.

At the beginning, many small platforms felt that car loans were a business that could not be compensated. After entering, they found that this was not the case.

"The car loan industry has a scale effect. If the loan amount is not 100 million, it is very difficult to make money. If the collection is not in place, you will lose money." Peng Tan said, therefore, many small platforms voluntarily withdrew and abandoned the car loan business.

The financial sector, which has never been profitable and profitable, will, if it does, be the bank’s territory, not the start-up company.

03 Way out

Interestingly, despite the industry's collapse, the total size of P2P car loans in 2017 was 247.7 billion yuan, an increase of 36.7% year-on-year.

More than half of the industry died, but the amount of car loans is growing.

This shows that the car loan industry has not gone downhill, but has moved toward concentration and monopoly.

Since November 2017, the platform for the top four monthly transactions of car loans platform has accounted for nearly 60% of the total amount of car loans when the total sum of transactions was the highest.

The big platform is actually quite moist, but the national small platform is rather difficult.

Is the destiny of the small platform destined to exit the stage of history?

"In terms of car loan, the biggest way is to do differentiated competition," Peng Tan said.

In fact, the entire loan payment business process is very long and can be optimized from the aspects of tariffs, timeliness, deadlines, quotas, convenience, speed of cancellation, characteristics of wind control, and methods of obtaining passengers.

On the other hand, it is to deepen the market.

"For example, there are a lot of local car loan companies that live well. They just ploughed into a local market and made this market through." Zhang Xin said that the car loan industry is a very heavy business, only doing a good job There is also a chance for a region.

A number of industry practitioners believe that in the future, if you can break the limits of offline customers and get online, you may have the opportunity to “carry over”.

Once it is realized, it will be an era ahead of all other companies.

However, they also believe that the future of auto finance cannot rely solely on big data and model innovation.

"We must establish an ecological closed-loop, use the scenario to control the borrower, and judge the repayment ability according to the borrower's overall situation, instead of simply using the collateral to measure value and determine risk." A number of practitioners expressed this view.

In addition, it is worth noting that, despite the bank's loan withdrawal some time ago, at present, the bank’s entire pool of funds is spilling over, and the money is too much to spend, and looking for assets everywhere.

"A lot of city commercial banks have set up small loan companies in the local area. Each time they first give credit to the car loan platform through small loan companies, and then they take out the money in disguised form." Zhang Xin said that this model is prevalent.

"Money is like water. You can't stop it forever. It will find a gap and flush it out again." Zhang Xin said that the bank's money is slowly overflowing through the gap.

This is "maybe a good thing" for the car loan industry.

The entire financial industry is caught in the "asset shortage."

As a good asset car loan, despite its ushering in a wave of closures, it is still quite imaginative.

"In the future, the car loan industry will also break out. This round of reshuffling is only a phased correction." Many industry practitioners are still full of confidence in the future.

(At the request of the respondent, some names in the text are aliases)