BEIJING, Sept. 10, 2014 /PRNewswire/ -- Lentuo International Inc. (NYSE: LAS) ("Lentuo" or "the Company"), a leading non-state-owned automobile retailer headquartered in Beijing, today provided an update on its strategy for the rapid and comprehensive expansion of its pre-owned car business.
According to the China Automobile Dealers Association ("CADA"), Beijing is poised for rapid growth with transaction volumes for pre-owned cars having already surpassed those of new cars. During the first half of 2014, pre-owned car transaction volumes in Beijing exceeded 345,400 vehicles, an increase of 8.7% year-over-year. The ratio of pre-owned car sales to new cars sales increased to 1.36:1. Specifically, the transaction volume for FAW-VW Audi, BMW, and Porsche accounted for 10.4% of all transactions, demonstrating the strong growth potential of high-end pre-owned cars in Beijing.
The joint venture with Bitauto and UXIN, which will originally be centered on Beijing and gradually expand to other cities as the market develops, is currently awaiting official registration approval from the State Administration for Industry & Commerce which it expects will be completed by the end of September 2014 with operations beginning before the end of December 2014. The JV will integrate the resources of each partner to build the largest online-to-offline ("O2O") platform exclusively focused on high-end pre-owned cars in China.
Lentuo is currently in talks with major Chinese financial institutions to cooperate in adding a number of financial value-added after services which will include inventory financing, extended warranties, personal loans and will eventually expand into rentals, logistics and trade-in financing. These new financial instruments will not only provide strong financial support for the rapid expansion of Lentuo's pre-owned car business, but will also enhance the Company's profitability with a new high-margin revenue driver.
The Company is also well positioned to capitalize on this market opportunity as it emerges outside of Beijing. Recent statistics from the CADA show that during the first half of 2014, pre-owned car transaction volumes increased 12.77% year-over-year to 2.8 million vehicles with monthly transaction volumes exceeding 500,000 vehicles. The Company expects to see substantial growth in pre-owned car sales based on CADA data predicting pre-owned car sales growing from 9 million cars in 2014 to 20 million in 2020.
"China's pre-owned car market is set to enter an explosive stage of growth which we are ideally positioned to benefit from," commented Mr. Hetong Guo, Founder and Chairman of Lentuo International. "New car sales in China surpassed 13.6 million vehicles in 2009 to become the largest car market in the world. With Chinese drivers buying new cars every five years on average, 2014 is a critical year in the development of the pre-owned car market. We are confident that we fully understand the market and have correctly assessed its potential and current weaknesses. We are moving quickly to develop a first-mover advantage in this new and exciting market where profit margins are much higher than new car sales. We are confident that Lentuo's 20 years of experience, solid reputation for quality and reliability, technical expertise, and range of value-add services and products will attract customers and provide significant and stable growth momentum going forward. We remain committed to achieving our strategic goal of developing a nationwide pre-owned car business."
About Lentuo International Inc.
Founded in 1994, Lentuo Group ("Lentuo") is a leading Chinese automobile retailer headquartered in Beijing. Through its many subsidiaries, Lentuo operates 4S franchise dealerships, automobile showrooms, automobile repair shops, a car leasing company, automobile financing and a pre-owned car business.
Lentuo dealership brands include FAW Audi, FAW-Volkswagen, Shanghai VW, FAW Toyota, FAW Mazda, Honda, and Chang'an Mazda. Since its establishment, Lentuo has developed relationships with many other well-known domestic and overseas brands as it expands further into the luxury car market. Annual sales for Lentuo's dealership brands consistently rank among the top in Beijing and China. On December 10th, 2010, Lentuo was listed on the New York Stock Exchange as the first and only Chinese auto-dealership group.
Over the past 20 years, Lentuo has received various industry awards from the government, OEMs and industry associations. Lentuo has been recognized as a Famous Trademark by the Beijing Administration for Industry and Commerce (BAIC), a Top 50 Auto Dealer in China, a China Automobile Sales and Service Top Ten Enterprise Group, and has been awarded the Outstanding Contribution Award and Distinguished Contribution Award in the China Automobile Dealers Industry by CADA. It is the only triple A-rated Beijing Automobile Works dealership group in China to have been designated an FAW strategic partner, and awarded FAW Audi Sales Award, FAW Audi No. 1 Customer Satisfaction, FAW–Volkswagen National Sales Champion, FAW-Volkswagen Gold Award for Service Satisfaction, Shanghai Volkswagen 6 Star-Rated Franchise Dealer and FAW Mazda National Sales Champion.
For more information, please visit http://lentuo.investorroom.com/
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
For more information, please contact:
Ms. Jiangyu Luo
Lentuo International Inc.
Email: [email protected]
Mr. Christian Arnell
Telephone +86 10 5900 1548
Email: [email protected]
Ms. Linda Bergkamp
Phone: +1-480-614-3004 (U.S.A.)
Email: [email protected]
SOURCE Lentuo International Inc.