Stellantis will close one of the factories it operates in China alongside joint-venture partner GAC.
The car manufacturer is restructuring operations in the country due to low sales. In fact, it managed to sell just 12,288 vehicles in the first seven months of the year, all of which were Jeeps. This is despite the two factories it operates having the ability to produce 328,000 vehicles annually.
In a statement issued to Reuters, GAC said it will transfer its current production its Guangzhou site to its Changsha factory in a move to “increase [the] utilization rate of plants and lower cost.” This Changsha site has the capacity to make 164,000 vehicles a year.
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Stellantis chief executive Carlos Tavares says the company is studying a new strategy for the Chinese market. This will see the carmaker launch its Opel brand in the local market and plans to offer a number of fully electric vehicles through it. Tavares has confirmed the new strategy will be in place by the end of the year.
In addition to its venture with GAC, Stellantis runs a joint venture with the Dongfeng Motor Group. This venture has previously closed two plants to tackle overcapacity and between January and July, sold 47,788 vehicles.
Stellantis is far from the only car manufacturer forced to make changes in the Chinese market. Mazda recently ended its joint venture with FAW while Hyundai and its joint venture partner BAIC recently sold a factory to electric vehicle start-up Li Auto.
