The financing structure affects the financial status and business performance of the enterprise. Due to the different economic, legal, and industrial environments, the financing structures of different countries and industries are also different.

This article uses the annual financial data of 12 listed auto dealer groups in China from 2010 to 2019 as a sample. This paper first identifies the characteristics of the financing structures of the auto dealers, and then analyzes in detail three main financing approaches to auto dealerships, including taking bank loans, issuing debts and issuing shares. Finally, through empirical analysis, the impact of the financing approaches on the dealers’ competitiveness is obtained.

This article mainly draws the following conclusions: First, the percentage of internal financing of listed auto dealer groups in China had gradually increased from 2010 to 2019, the percentage of equity financing has gradually declined, and the percentage of debt financing has not changed much. Today, the dealers prefer internal financing, followed by equity financing, and finally debt financing. The percentage of internal financing is still lower than that of developed countries. Second, the percentage of internal financing, debt financing, and equity financing of listed auto dealers in China are positively, negatively, and negatively correlated with the ROE, respectively; the increase in the percentage of internal financing will help improve the ROE. Third, the increase in the percentage of internal financing of listed auto dealers in China is mainly due to the substantial increase in undistributed profits. Good business performance provides a basis for the growth of undistributed profits. The preference for equity financing over debt financing is mainly due to the fact that the cost of debt financing in China to the dealers is higher than the cost of equity financing, and the concentration of the shareholding is very high.