Stellantis NV will consolidate its automotive financial services in China to create a wholly-owned automotive finance company as part of its restructuring in the world’s largest automotive market, where he struggled.
The automaker that makes Jeep, Peugeot and Citroen 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 automobile finance company created 15 years ago with Dongfeng. The Wuhan-based automaker will take over the shares. The agreement is subject to regulatory approval and is expected to close in the second half of the year.
The restructuring is 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 establish a foothold in the market prior to their merger the last year. For example, the joint venture created between FCA and the Chinese car manufacturer 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 increase participation in the joint venture 50-50 to 75%.
“As we continue our efforts to drive profitable growth in China, we also need to reset our financial services offering in the country, as we have done in other major markets,” said Stellantis CEO Carlos. Tavares, in a statement. “This decision will greatly support our recovery plan in the country while promoting a smoother customer journey.”