As of March 31, 2013, the Company has leased over 38,000 trucks since launching its commercial vehicle sales and leasing business in March 2008.
Used Vehicle Leasing
Under the Company's used commercial vehicle sale-leaseback program, 60 used trucks were leased in the three months ended March 31, 2013, compared to 290 in the prior-year period. Revenue generated from second-hand commercial vehicle leasing arrangements during the three months ended March 31, 2013, was $280,000, compared to $794,000 in the comparable prior-year period.
Revenues from value-added services (diesel, tire and insurance financing services) totaled $38,000 during the three months ended March 31, 2013 compared with $234,000 during the same period in prior year. The Company's tightening of its credit control as a way to manage default risk led to a decrease in value-added services revenues. As of March 31, 2013, over 260 tire outlets and over 80 fueling stations participate in the program.
Insurance Agency Services
The Company launched its own insurance agency business in December 2011 and has signed agreements with four major insurance companies in China to sell insurance: China United Property Insurance Company Limited, Sinosafe General Insurance Co. Ltd. (Hua An Insurance), Ping An Insurance (Group) Company of China, Ltd., and China Life Property and Casualty Insurance Company Limited. AutoChina's 534 store locations are each licensed to sell insurance from these carrier partners, and, as of March 31, 2013, the Company also operated 23 insurance agency branch offices throughout China that are solely dedicated to this service. The Company is actively seeking additional partnerships and securing additional regulatory licenses.
Revenue from AutoChina's insurance agency business was $3.7 million for the three months ended March 31, 2013, a 97.9% increase from $1.9 million in the prior-year period.
Expansion of Specialty Finance Store Network
During the 2013 first quarter, AutoChina established an additional commercial vehicle financing and service center in Anhui province and closed a commercial vehicle financing and service center in Jilin province, bringing the total number of locations to 534 as of March 31, 2013. The Company operated 512 financing and service centers at March 31, 2012. The Company operates commercial vehicle financing and service centers in the Anhui, Beijing, Chongqing, Fujian, Gansu, Guangdong, Guangxi, Guizhou, Hebei, Henan, Hubei, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Sichuan, Tianjin, Yunnan, and Zhejiang areas of China.
During the second half of 2012, AutoChina closed on a transaction to purchase 23 floors of newly constructed office space in the Kai Yuan Center building, which was built by the Company's Chairman and CEO Mr. Li and is the tallest building in Shijiazhuang at 245 meters in height. The new office space was purchased for approximately $56.4 million, and the Company also assumed approximately $102.9 million in debt as part of the acquisition, resulting in a total transaction value of approximately $159.3 million.
In April 2013, AutoChina moved its headquarters into the new Kai Yuan Center building, which now serves as the control center for each of the Company's 534 commercial vehicle financing and service centers located throughout China. The Company does not anticipate that it will occupy the entire office space purchased, and expects to lease out the unoccupied space, the proceeds from which will be reported as rental income.
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