SEOUL, South Korea--(BUSINESS WIRE)--Hyundai Capital Services, the auto financing arm of Hyundai Motor Group (KOREA:005380), on October 17 announced that the company has received the European Central Bank’s (ECB) approval in September to establish Hyundai Capital Bank Europe (HCBE), a major booster for Hyundai and Kia car sales in Europe.
HCBE will be headquartered in Frankfurt and commence operations in December, gradually offering wholesale and retail financing solutions linked to the sales of Hyundai and Kia brand cars, full service fleet management, acting as an intermediary for insurance and warranty products of insurance companies in Europe and offering deposit taking business for private customers and dealers.
With initial capital of 67.1 million euros (USD 75.1 million), HCBE is 80 percent financed by Hyundai Capital Services and the rest by Kia Motors.
HCBE received the license from ECB on September 23 after a deep review by the German financial authority (BaFin: Bundesanstalt für Finanzdienstleistungsaufsicht).
With this green light in hand, Hyundai Capital Services Deutschland GmbH, which has functioned as a consulting firm providing financing solutions to Hyundai and Kia brands since 2010, will change its name to Hyundai Capital Bank Europe and provide direct auto financing services - dealer financing, installment financing, lease, insurance brokerage and others - to consumers.
Moreover, the ECB authorization is expected to provide leeway for Hyundai Capital when seeking for business expansion within European Union states.
“Hyundai Capital Bank Europe will compete with global powerhouses in Frankfurt, the heart of European finance. This is very different from other Korean financial institutions that have been targeting Korean consumers or businesses overseas,” a Hyundai Capital official said.
“According to market data, about 75 percent of car buyers in Germany use auto financing programs. That ratio of import car brands including Hyundai and Kia cars is 73 percent and we expect to bring this figure to be above average. HCBE will support Hyundai Motor Group sales,” he added.
Hyundai Motor Group has been expanding its presence in the German automotive market, one of the largest in Europe. Hyundai Motor and Kia Motors are expected to sell 94,000 units and 58,000 units of cars respectively by the end of the year, taking over 4.4 percent of the local market, or becoming the third-largest seller among foreign car brands in Germany[1].
Hyundai Capital operates in the U.K., Hyundai Capital United Kingdom, a joint venture with Santander Consumer Finance. It also has entities in China, the U.S. and Canada.
About Hyundai Capital Services
Hyundai Capital Services is Korea’s No. 1 provider of consumer financing products, including auto financing, auto leasing services, personal loans and home mortgages. Established in 1993, the company is a financial service unit of Hyundai Motor Group, and has businesses in the U.S., U.K., China, Canada and Germany.
[1] The figure is car sales number. Internal source.
