Stellantis Revamps Auto-Finance Business With BNP, Santander

(Bloomberg) -- Stellantis NV is overhauling its European leasing and financial services with partners BNP Paribas SA, Credit Agricole SA and Banco Santander SA, simplifying the automaker’s patchwork of existing operations in the region.

The maker of Jeep, Peugeot and Fiat vehicles will create a leasing joint venture company with Credit Agricole, according to a statement. It will also set up ventures with BNP and Santander to manage financing activities.

The agreements are expected to be signed in the first quarter of next year and take effect in the first half of 2023. The goal is to shrink the number of Stellantis finance and leasing entities in each country to two from five while expand the businesses, according to Philippe de Rovira, the automaker’s head of affiliates.

“We have a huge opportunity to grow in the coming years” in the leasing segment, he said on a media call. Stellantis is less than half the size of the the leading lessor in the region now.

The merger between Fiat Chrysler and PSA Group early this year created a global empire with a collection of lending arms. FCA and Credit Agricole co-own FCA Bank, while PSA had joint ventures in various countries with Santander, and co-owned Opel Vauxhall Finance with BNP. 

The European reorganization follows a deal Stellantis reached in the U.S. to buy Houston-based auto lender First Investors Financial Services Group to set up its own finance arm. In-house finance companies at rivals Volkswagen AG, General Motors Co. and Ford Motor Co. have boosted profits, especially during the global chip shortage that’s limited production and crimped sales.

Read more: VW Lending Unit Cashes In on Soaring Used-Car Values

Under Stellantis’s European plan, the new financing ventures will have clearly delineated geographic reach but serve all 14 of its brands. The automaker’s shares traded 1.5% lower as of 10:30 a.m. Friday in Paris.

In a separate statement, Credit Agricole said the target of the leasing joint venture is to manage a fleet of more than 1 million vehicles by 2026. The bank will also emerge from the deals with its own multi-brand auto-financing arm that will eventually compete with Stellantis. 

The move to streamline auto financing in Europe is part of CEO Carlos Tavares’s push to extract 5 billion euros ($5.7 billion) in synergies from the merger. He has unveiled plans for common electric-vehicle platforms, battery supplies, software and has also pledged to revise auto distribution channels in Europe. 

Key Highlights 

• Credit Agricole to acquire the 50% stakes in FCA Bank and Leasys Rent, currently owned by Stellantis.
  • The new wholly owned entity will continue to operate its financing activities with others carmakers, aiming to manage 10 billion euros in outstanding financing by 2026.
• BNP will operate financing activities through JVs with Stellantis in Germany, Austria and the U.K.
  • The deal is expected to increase BNP Personal Finance’s outstanding amounts in financing by about 6 billion euros at closing, the bank said.
• Santander will operate financing activities with Stellantis through JVs in France, Italy, Spain, Belgium, Poland, the Netherlands, and via a commercial agreement in Portugal.

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