South Korea's largest automaker will provide credit to private and corporate customers in August in Beijing, according to Li Songhe, manager of the marketing planning department of Hyundai Motor Group (China) Ltd.

It would be the fourth auto finance company to begin operations in China if the project gets the approval from China Banking Regulatory Commission following General Motors Corp, Ford Motor Corp and Toyota Motor Corp.

"Automakers will generate higher profit from the service sector in a matured auto market and we hope the finance company will also bolster sales with a more flexible marketing strategy" Li said.

However, details such as possible partners and the holdings of its shareholders were not announced.

In May last year, Xu Heyi, chairman of Beijing Hyundai Motor Co, Hyundai's only venture in China with Beijing Automobile Group Corp, said it plans to jointly set up the firm with Beijing Automobile Investment Co Ltd and another American company.

"The cooperation of the three parties is still uncertain so far," Li told Shanghai Daily yesterday.

However, Beijing Automobile Group Corp may have withdrawn cooperation due to a dispute over who has major control of the firm and financial problems, according to people close to the negotiations yesterday. To date, Chinese government has approved five foreign auto giants including GM, Ford, Toyota, Volkswagen AG and Daimler-Chrysler Group to operate a finance business while French-based PSA Peugeot Citroen Automobile Corp and Bank of China have submitted an application to run a credit firm last year.