The OEM's investment has not been disclosed, but is significant, according to a spokesperson for the carmaker. Nevertheless, FengChe remains the majority shareholder and its management structure is unchanged.
Used car activity in China is growing and the country is on target to become the world’s second largest used car market after the US. That growth is likely to be helped as new car sales in China slow.
Passenger car sales last year stood at around 23.8m, according to China’s Association of Automobile Manufacturers, down 4% on the previous year. It is the first decline in three decades. Meanwhile, used car sales have increased and figures for 2018 are expected to surpass 14m.
FengChe currently has 25,000 used car dealer customers and has 240,000 used cars in its systems.
Marc Lechantre, senior vice president of the Used Vehicles Business Unit at Groupe PSA (pictured right), said the investment in FengChe was part of the company’s Push to Pass plan, which is designed to increase its international footprint and revenues.
When it announced the plan in 2016, PSA said that by 2021 it aimed to transform the company and meet customers’ needs by anticipating changes in car usage patterns.
“We are very confident that in FengChe we have found a strong, dynamic partner who we believe will be a major player in the Chinese automotive market," he said.
Founded in Shanghai in 2015, FengChe provides services including used car online and offline sales operations, inventory management, self-financing and aftersales management. Company founder, Tao Genyuen (pictured left), said its aim following the investment from Groupe PSA was to further develop the used car business in China with “a more cross-cutting vision”.
“Indeed, the ultimate goal for FengChe is to build a “one stop shop” for the Chinese automotive industry in order to connect the upstream and downstream and provide a closer link between buyers and sellers using innovative technologies, which will make automobile transactions simpler," he said.
Developments in China's new and used car sector will be under discussion at this year's Automotive Logistics Global Shanghai conference (formerly Automotive Logistics China), being held between April 16-18.