Stellantis to restructure auto finance services in China
Stellantis NV will consolidate its auto financial services in China to create a wholly owned auto finance company as a part of its restructuring in the world's largest auto market, where it has struggled.
The automaker that makes Jeep, Peugeot and Citroën vehicles and its joint venture with Chinese automaker Dongfeng Motor Corp. Ltd. will sell their stakes in JV Dongfeng Peugeot Citroën Auto Finance Co., the 15-year-old auto finance firm with Dongfeng. The Wuhan-based automaker will take over the shares. The deal is subject to regulatory approval and is expected to close in the second half of the year.
The restructuring is a part of Stellantis' Dare Forward 2030 strategy to operate an "asset light business model" in China as the company's predecessors, Fiat Chrysler Automobiles NV and French automaker Groupe PSA, failed to get a foothold in the market prior to their merger last year. For example, the joint venture created between FCA and Chinese automaker GAC Motor Co. Ltd. produced and sold just one vehicle last month, according to a filing last week with the Shanghai stock exchange. Stellantis is in the process of increasing its stake in the 50-50 joint venture to 75%.
“As we continue our push to drive profitable growth in China, we need to also reset our financial services offering in the country, as we have done in other major markets,” Stellantis CEO Carlos Tavares said in a statement. “This move will greatly support our revival plan in the country while also driving a more seamless customer journey.”