Stellantis will soon have its own financial arm after years of being the only big one U.S. carmaker headless. Bloomberg reports that the company pays $ 285 million First Financial Services Group for investors, a Houston-based car lender.
The company will pay $ 285 million to an investor group with the planned deal completed at the end of the year. Stellantis CEO Carlos Tavares defined the deal as “a milestone that will increase profits.”
“Direct ownership of a financial company in the U.S. is an opportunity in blanks that will allow Stellantis to provide our customers and distributors with a full range of financing options,” Tavares said Wednesday in the statement.
The move puts Stellantis’ the collaboration with Santander is questioned. In 2013, just before Chrysler merged with Fiat to form FCA, Chrysler partnered with Santander Consumer to form Chrysler Capital, which has been the company’s only financial sector ever since. But when the merger was completed and FCA had a new CEO to Sergio Marchionne, he had other ideas for a loan. From Automotive news:
Fiat Chrysler tried several years ago to follow a different financial services strategy. At the time, CEO Sergio Marchionne announced in June 2018 that the vehicle manufacturer intended to establish a captive financing company, either by acquiring Chrysler Capital or another business or by building one from scratch. . The carmaker abandoned this effort after Marchionne’s sudden death that year and chose to maintain its agreement with Santander.
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By now Chrysler Capital will continue to operate and Santander says it will continue talks on new opportunities beyond 2023.
Santander is known as one of the industry’s leading sub-prime providers. Now Stellantis enters collaboration with First Investors Financial, a company that not only does it deal with subprime lending, but it doesn’t exactly have a starr history. We’ll see if the move entails additional risky loans.