Chery Automobile has launched an auto financing company in Shanghai, the first for a Chinese automaker.

Registered capital of the firm is 500 million yuan, and the company will offer loans to car buyers, dealers and operational equipment providers.

It will also provide auto financing for car rental businesses.

Chery holds an 80 percent stake in the unit, and Anhui-based Huishang Bank holds the rest. Auto financing offers more flexibility to loan applicants than do traditional bank loans. But the interest rates are usually around 10 to 30 percent higher.

China also has two auto financing firms set up by foreign automakers.