The financial services arm of the Royal Dutch/Shell Group of companies said that following an internal strategic review it has decided to discontinue the future development of its Shell Auto Finance business.
The company had been bullish about its ambitions in the retail and fleet automotive sectors and had recruited senior industry executives including Shell vice-president of vehicle finance Richard Whitton, formerly chief executive officer of Mercedes-Benz Finance, and David Bird, formerly chief operating officer of Arval PHH.
A spokesman for Shell Capital said: 'We set up on a trial basis in the UK and it met a number of our criteria, but it would require levels of direct and indirect funding that could not be justified in terms of other group investment requirements.
'We have conducted a strategic view of how vehicle finance fitted in with the rest of the business and the potential levels of return are not as high as other opportunities.'
The 38 employees of Worthing-based Shell Auto Finance will be able to apply for other jobs within Shell, although the spokesman would not rule out redundancies.
As a retail proposition sold through new and used car dealers, Shell Auto Finance has already built a portfolio of 4,000 hire purchase and personal contract purchase contracts, and the company insists these finance agreements will be honoured, although it will write no new business. The spokesman was unable to confirm or deny whether the company would seek to sell this portfolio to another finance house.
When Shell Capital launched Auto Finance, it claimed the new division 'extends the trust in Shell's core fuel products into car finance and other related services'.
Finance customers would be rewarded with a 'pluspoints' card and every month have pluspoints credited to their accounts that were redeemable for Shell vouchers, Air Miles, shop vouchers or donations to charity. The company was understood to be preparing for a launch into the fleet finance sector by the end of this month.