Stellantis launches its auto financing big bang

Posted on Dec. 2021 at 8:00

White smoke at Stellantis. After months of negotiations, the automotive group resulting from the merger of PSA and Fiat Chrysler (FCA) announced on Friday that it had “entered into exclusive negotiations” with its banking partners to overhaul its car financing system: from the The complex history of the group, the partnerships with the three European champions of automobile credit – BNP Paribas Personal Finance (PF), Crédit Agricole Consumer Finance (CACF) and Santander Consumer Finance (SCF) – will change profoundly. These changes should be effective in 2023.

After the acquisition of an auto loan specialist in the United States, announced in September, “Stellantis reaffirms its desire to strengthen the potential of its global financing activity, marking a new stage in Europe with its historical banking partners and to create a full-fledged leaser in Europe, ”said Carlos Tavares, CEO of the manufacturer.

Doubling your fleet in leasing

Each of the three banks has its account there. First through leasing, where Stellantis will team up with Crédit Agricole. Until then, the group had been operating in dispersed order, via two brands Leasys and F2ML, totaling a fleet of 700,000 vehicles. The manufacturer will merge them and set up a single brand, 50-50 owned with the specialized subsidiary of Crédit Agricole. This brand will be “multi-brand”, thus going beyond the Stellantis universe, and aims to become a “European leader”.

This is all the more necessary as the leasing market is booming. “The evolution of the regulations which reinforce the ecological transition encourages to turn to the electric one, explains Pierre Blanc, at the head of the consultancy firm Athling. Coupled with the modification of uses in mobility, the development of the leasing market initiated a few years ago will accelerate, including for second-hand vehicles. “

Streamline credit activity

The group is also reviewing its approach to classic car loans: it is replacing its brand partnerships with a purely geographic approach. Initially, Santander only worked with PSA, BNP Paribas with Opel Vauxhall and Crédit Agricole with FCA.

This part of the business will be split between BNP Paribas and Santander. Via a joint venture, the French bank’s consumer credit subsidiary thus becomes the exclusive partner of all Stellantis brands in Germany, Austria and Great Britain. A similar system has been put in place with Santander, which is taking over other major markets including France, Italy, Spain and Belgium.

Cost reduction

Complex, the movement is however logical: resulting from the merger of FCA and PSA, Stellantis inherited pre-existing banking partnerships. The new group found itself at the head of two leasing brands, and in three credit joint ventures … At the end of this vast changeover, each geography will therefore only have two entities, that of leasing – of which the name has not yet been stopped – and that corresponding to the credit.

The move will allow Stellantis to improve customer service and ultimately commercial efficiency. But it is also part of the cost hunt launched by the group. These internal reorganizations will notably result in a reduction in the number of IT systems to be maintained. And a significant number of employees should join CACF, which will develop new credit activities outside Stellantis.

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