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Stellantis moves to set up its own lending unit

Stellantis is buying Houston-based auto lender First Investors Financial Services Group to set up its own finance arm in the U.S., a move that should support sales and eventually boost profit. The only major traditional automaker in the U.S. without its own finance company agreed to pay $285 million to a group of investors led by Gallatin Point Capital and Jacobs Asset Management, according to a statement. The transaction is expected to close by year-end. Stellantis was formed via the merger between Fiat Chrysler and PSA Group early this year. Carlos Tavares, the PSA boss who became the combined company’s chief executive officer, called the deal to acquire First Investors a milestone that will increase earnings and enhance customer loyalty. “Direct ownership of a finance company in the U.S. is a white-space opportunity which will allow Stellantis to provide our customers and dealers a complete range of financing options,” Tavares said Wednesday in the statement.  Having an in-house finance company has helped rivals General Motors Co. and Ford Motor Co. pad profits, especially during the global semiconductor shortage that has limited production and crimped sales. GM bought subprime lender AmeriCredit Corp. in 2010 and renamed it GM Financial. The operation generated a $2.76 billion profit in the first half -- roughly a third of the companyÂ’s adjusted earnings before interest and taxes. Trouble for Santander? The First Investors acquisition could spell trouble for Chrysler Capital, the operation that Santander Consumer USA Holdings Inc. and Chrysler set up in 2013 before the U.S. automaker completed its merger with Fiat. In a statement, Santander Consumer said itÂ’s committed to supporting Stellantis through the term of their existing agreement and its transition. Santander Consumer will also have “ongoing conversations with Stellantis about long-term mutually beneficial opportunities beyond 2023,” the company said, adding that its consumer business remains strong and has “delivered solid results for our shareholders.” This, along with support from its parent company, will allow the lender to “pursue additional opportunities as they arise.” The lenderÂ’s U.S.-listed stock fell 1.5% in New York trading Wednesday after Bloomberg reported Stellantis was preparing to announce a new finance partner. Stellantis shares rose as much as 1.3% in Paris trading Thursday.

Certain Chrysler owners eligible for buyback program

Certain car owners whose Chrysler vehicles contain dangerous defects will soon have a way to get rid of their lemons without losing money. As part of an agreement with federal regulators, Fiat Chrysler Automobiles has agreed to buy back more than 500,000 vehicles susceptible to veering out of control without warning at above market-value prices. The deal mainly covers certain models of RAM trucks, the Dodge Dakota pickup and Dodge Durango SUV. Further, owners of more than 1.5 million Jeep Liberty and Grand Cherokees at heightened risk for lethal fires are eligible to trade in their vehicles at above market value or, alternately, get a gift certificate if they prefer to have repairs made. Chrysler has "a heavy responsibility to make sure the products they make are safe for the traveling public," said Mark Rosekind, administrator of the National Highway Traffic Safety Administration. "... Here, we are sending an unambiguous signal to industry that if you skirt the laws or violate the law, or don't live up to the responsibility that consumers expect, we are going to penalize you." The buy-back and trade-in options for motorists come as part of an unprecedented penalty NHTSA slapped against Chrysler for violating federal motor-vehicle safety laws. Chrysler will pay a $105 million fine, the highest ever levied by the regulatory agency. In addition to the buy-backs, Chrysler also agreed to an independent monitor for three years. Investigators had outlined problems in the company's conduct in 23 recalls that affected more than 11 million defect vehicles. As part of a consent-order agreement, Chrysler acknowledged it did not notify vehicle owners of recalls in an effective manner and did not notify NHTSA of safety problems. Though those recalls affected millions of drivers, the buy-back and trade-in options are only for a small portion of the vehicles involved. Because Chrysler struggled to fix the problem and no repair was apparent, Rosekind said the buy-backs are reserved "for customers who didn't have a remedy." Buy-backs are for trucks and SUVs affected by three recalls that occurred in 2013 (recalls 13V-038, 13V-527 and 13V-529), that addressed a rear-axle pinion nut that could come loose and cause a loss of vehicle control. Those recalls covered 579,228 vehicles, including 2009-2012 Ram 1500, 2500, 3500, 4500 and 5500 trucks, 2009-2012 Dodge Dakotas, 2009 Chrysler Aspen and the 2009 Dodge Durango.

Stellantis previews 4 electric platforms: Here's how they'll be used

Stellantis EV Day is hitting hard and fast this morning, with big news coming from Dodge and Ram and Jeep and the rest. But to support those brand transformations, a core initiative within Stellantis will help it become a leader in electrification. To do that, the group is developing platforms and technologies with cross-shared components and systems. This starts with four flexible BEV platforms: STLA Small, STLA Medium, STLA Large and STLA Frame. As for targeted numbers, they’re lofty: By 2024, Stellantis aims for over 500 miles of range, 0-62 mph in 2 seconds and charging 200 miles of range in 10 minutes. The four platforms will offer battery capacities from 37 kWh to more than 200 kWh. More specifically, STLA Small will offer 37-82 kWh and up to 300 miles of range. STLA Medium will have 87-104 kWh and up to 440 miles. STLA Large will provide 101-118 kWh and up to 500 miles of range. The truck-focused STLA Frame will provide 159-200+ kWh and up to 500 miles of range (and will support an electric Ram 1500 pickup). Chrysler EV Front 34 View 8 Photos Stellantis has big plans for the STLA Large platform, and is currently developing eight vehicles for it in the next three to five years. Examples of possible vehicles shown include a midsize Ram truck and a Jeep off-roader that could fight against the likes of the Toyota 4Runner. Stellantis design boss Ralph Gilles could be seen in a presentation looking over a Chrysler electric crossover based on this platform. We also saw a Wagoneer badge teased momentarily. There was a rendered silhouette of a crossover that looked like it could compete with the Ford Mustang Mach-E. Gilles said the platform would allow Stellantis to “create a long-range luxury sedan, an all-conquering muscle car, a heart-of-the-market DUV, a heart-of-the-market SUV, a very capable Jeep off-roading white-space opportunity vehicle as well as a new mid-sized truck.” See for yourself in this video starting at the 90-minute mark. As for powertrains, Stellantis is developing three electric drive modules with a shared, scalable inverter, and other common components, as well as in-house software to control them. Those drive units will offer from 70 to 330 kW (94-402 horsepower). More specifically, one EDM will provide 70 kW, a second will provide 125-180 kW, while the most potent can produce 150-330 kW.