Mercedes-Benz Auto Finance China is getting set to start leasing in China next month. The Daimler Financial Services subsidiary will initially focus on fleet leasing in Beijing, then expand into consumer leases throughout the country.

Is this a recipe for disaster? Consider the scenario: The vehicle market in China is growing. Sales volume last year hit 9.4 million units, and government officials are drafting a plan to bolster sales to 10 million this year, with 10% expected growth in each of the next three years. Unless MBAF’s residual-value-setting is rock solid, it seems that once the growth levels off, the losses might start to pile up.

To read more about the program, click here.

And here’s an article about the Chinese government’s decision last November to lift leasing restrictions.