Banque PSA, the finance arm of Groupe PSA, has entered a joint venture with DongFeng Motor Group to provide leasing contracts in China.
DongFeng Motor Group and PSA Financial Services Nederlands will own a 25% share each in the new business. The other half will be owned by Dongfeng Peugeot-Citroën Automobile (DPCA), another joint venture involving the two carmakers.
The newly-created, Wuhan-based company, advertised as the captive finance arm of DPCA, will offer contracts both with and without a purchase option, with a primary focus on the Peugeot and Citroen brands.
The company’s initial capitalisation stands at REN 300m (£33.9m).
Rémy Bayle, chief executive officer of Banque PSA Finance, said: “The leasing activities in China will be an essential lever that contributes to the sales performance of our brands. They will represent a complementary full range of offers to the current financing solutions and will address a new usage of the automobile. This new activity will bring a strong support to the growth plan of DPCA.”
DPCA reported a jump in new vehicles penetration rate from 27.2% to 40.7% in the 12 months to 2017. Total loan book grew 8.5% to €2.4bn (£2bn).