by Gilles Guillaume and Giulio Piovaccari
PARIS/MILAN, April 4 (Reuters) – Stellantis, which has finalized the simplification of the financial entities inherited in Europe from PSA, Opel and FCA, is currently extending the duration of leasing to help its private customers acquire their car in the current context of rise in interest rates.
“Rising interest rates are a challenge,” Philippe de Rovira, director of affiliates for the French-Italian-American automaker, said Tuesday during a press conference call. “One of the ways to maintain the ability of retail customers to buy cars is to extend certain lease contracts, typically extending them from three to four years.”
By spreading the cost of using a vehicle over a longer period, the monthly rent can stay the same despite rising rates and rising car prices.
Stellantis also announced the finalization of the agreements presented in December 2021, now that antitrust authorities and market regulators have given the green light.
The financial entities to reduce costs, IT systems: now unified financing companies, individuals, Santander (SNA.MC) > and BNP Paribas depending on the country, renamed Stellantis Financial Services, and a single operational leasing company for fleets and professionals , Leasys, resulting from the consolidation of Leasys and Free2move Lease, in a JV with Crédit Agricole.
Thanks to a less complex structure, Stellantis intends to be able to offer “tailor-made offers” to its customers, continued Philippe de Rovira. In a context marked by a tightening of access to credit and by financial turbulence, the presence of large banks in the final assembly should also help it to maintain a competitive offer.
“We are still in JV with three leading banks (…) and it is no secret that these banks have always had financing conditions better than those which a car manufacturer can access”, added the Director of Stellantis Affiliates.
The group’s objective is to become the European leader in rental with a fleet of one million vehicles by 2026, and to double its net banking income by 2030 to 5.8 billion euros.
This last objective will also be achieved thanks to the creation of a captive in the United States via the acquisition at the end of 2021 of First Investors. Stellantis also simplified its China operations in Q1 2023, with a single finance company and a single operating leasing company, both 100% owned.
Asked about the uncertainty arising from the recent banking crises, Philippe de Rovira replied that it did not affect the long-term objectives of his financing activities. He added that the main topic at the moment was to be able to deliver the record order portfolio accumulated over the component shortages. (Gilles Guillaume and Giulio Piovaccari, edited by Kate Entringer)
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