Stellantis announced the termination of the joint venture with the Guangzhou Automobile Group Co. (GAC) in China, opposing earlier plans to increase its stake from just a few months ago. Stellantis will keep its other Chinese joint venture with Dongfeng, after reaching an agreement on a share repurchase framework just a few days ago.
The Stellantis-GAC joint venture that started back in 2010 as FCA-GAC, produced several Jeep models for the Chinese market, including the Renegade, Compass, Cherokee, and Grand Commander. However, sales of the Jeep brand in China have been quite slow, prompting the automaker to shut down one GAC factory and two Dongfeng factories last year. The divorce between Stellantis and GAC signals an early demise of the China-only Jeep Grand Commander which was recently facelifted.
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As reported by Reuters, a Stellantis spokesperson said: “We came to the conclusion that it was better to close the joint venture”, describing it as a money-losing business. Despite the termination, Stellantis will still operate in China through its dealer network, selling imported instead of locally-produced Jeeps. More specifically, Stellantis said: “The Jeep brand will continue to strengthen its product offering in China with an enhanced electrified line-up of imported vehicles”.
Last January, Stellantis announced it would increase its stake in the joint venture from 50 percent to 75 percent. However, GAC said it wasn’t aware of that deal at the time, showing that there was an important communication gap between the two parties.
Stellantis hopes that strategic changes in its joint ventures will help it increase its share in the Chinese market which is currently below 1 percent. As part of the “Dare Forward 2030” plan announced in March 2022, Stellantis announced it would adopt an “asset-light” business model in China, aiming for a revenue of €20 billion ($20.3 billion) by 2030. This figure sounds ambitious judging from the €3.9 billion ($3.97 billion) turnover in 2021 from China, India, and Asia-Pacific regions.
