Bank of China to pull plug on DPCA finance firm

Shanghai, March 16 (Gasgoo.com) Bank of China plans to pull plug on Dongfeng Peugeot Citroen Auto Finance Co Ltd and to disinvest from the financing venture, an insider told Auto Business Review on March 13. This plan has been submitted to the China Banking Regulatory Commission for approval.

Dongfeng Peugeot Citroen Auto Finance Co Ltd is an auto financing venture in China set up in late May 2006 by PSA Peugeot Citroen finance unit PSA Finance Netherlands, Dongfeng Peugeot Citroen Automobile Co Ltd (DPCA) and Bank of China, and started business in August that year. Bank of China holds a 50% stake in the venture, with PSA Finance Netherlands and Dongfeng Peugeot Citroen each owning 25%.

The finance venture, the first auto finance company jointly established by a Chinese state-owned financial institution and auto makers, has supported the China sales of the two auto brands Dongfeng Peugeot and Dongfeng Citroen, as well as sales of imported Peugeot cars. Bank of China's extensive network was intended to help more end-users purchase cars through loans.

According to Auto Business Review, Bank of China has declined to comment on its divestment of the DPCA finance venture, and Dongfeng Peugeot Citroen has not confirmed nor denied the Chinese news report yet about this move by Bank of China.

To cash in on the huge business prospects in the world's second-largest vehicle market, several global and local automakers have started car loans in China, such as GM, Ford, Chrysler, Toyota, Volkswagen, BMW, SAIC, Brilliance, and BYD.