Why go into car rental? I remember when I spoke about car rental in Chengdu, I mentioned that regardless of whether you do or not, China has over 170 million cars on the road, now it's 220 million. Should we do it? That's the question. Should we get into car rental? We need to consider the benefits of car rental.

Understanding what *you are about* is crucial in the automotive industry, as cars are easily transformed into productized assets. Everyone entering this field should know what *they offer*, what *they aspire to become*.

What are the benefits and significance to the customers? What is the value of the car to the customers? There are financing leasing products on the market, but their positioning is definitely different. There are three types of car loan products: one is a lifeline loan, also known as a car collateral loan. The second is an entrepreneurship loan, such as loans for trucks or drivers for DiDi. The third is a consumer loan, where I have the ability and want to buy a car, opting for installment payments. The specific benefit depends on which of these three products you choose.

After years in the financing lease industry, I find that the concept of risk is interconnected. There are lease-backs, direct leases, operating leases, and capital leases. When selecting products, the risks vary, as do the risk control measures, contracts, and invoices. Additionally, there are the business conditions of leasing, the control of the leasing process, and the handling of lease assets—collection and disposal. We must pay attention to these concepts. Your product determines the type of process control and market handling you adopt.

If asset management isn't handled well, don't engage in vehicle manufacturing. Whether it's a life-saving loan, a startup loan, or a consumer loan, don't do it if asset management is poor—it's guaranteed to be a loss, at least not profitable.

Additionally, it's important to consider the distinctions between car and equipment leasing. Cars can represent an ecosystem concept, encompassing insurance, maintenance, after-sales service, manufacturers, financial institutions, and customers. It's a holistic concept, akin to an industrial chain, where each end matters, but finance is the most critical link, as it's the only element that can bring all others together. It's about having the means to get things done; without them, things can't be accomplished. If you truly want to enter the car leasing business, please take these factors into account. These are the foundational elements for consideration.

Risk factors include risk elements, risk incidents, and risk losses. Risk elements encompass material risks, moral risks, and psychological risks. To me, risk boils down to a single concept: not making a profit is risk. We need to analyze whether the risk is systematic or non-systematic. In the market for financing leasing products, whether dealing with financing leasing or auto financing leasing, many people make a mistake by not recognizing that non-systematic risks can escalate into systematic risks, leading to one failure after another.

Last year, with so many "bombs" exploding, the total exceeded 30 billion on the surface, and all the bombs were hanging under the Golden Lease and capital. If they were under auto financing and leasing, there would have been a widespread collapse. 2018 was the year of birth for auto financing and leasing. Auto leasing is a financial product, and we must not forget that risk is the *element of finance.

What is non-systemic risk? It's risk that won't impact your survival or downfall. For instance, if a salesperson has a very high order loss rate, that's not it. Or if a contract is signed incorrectly and leads to a lawsuit, that's not it either. Or if a customer's signature is forged, that's not it either. All these are examples of non-systemic risk. It's turning non-systemic risks into systemic ones.

Non-systemic risks consist of both internal and external factors. Internally, it's quite simple: people, systems, processes, management, and costs. By "people," I mean individuals. Systems refer to the absence of systems, not the complete lack thereof. Management pertains to poor management, such as inadequate management within a department or team, which is a systemic risk. Processes involve process control, such as inefficiency, which hinders competition with peers. External risks include market, customer, and other factors. For instance, Didi has different requirements in each city, which are risks faced by each city, not the nation as a whole. Therefore, it does not fall under systemic risks.

Discussing systematic risks. Can non-systematic risks turn into systematic risks? Clearly, a general manager's incident is a systematic risk, as it sets a wrong precedent. What are major systematic risks? It's the boss. The boss cannot be happy one day and stop doing business the next. So, when I was at Zhongli*, the boss once told us, "You can rest assured, in my lifetime, I will only focus on financing and leasing, and nothing else. Indeed, I haven't done anything else for 40 years."