The logo of Stellantis is seen on a company’s building in Velizy-Villacoublay near Paris February 23, 2022. — Reuters pic
Monday, 18 Jul 2022 11:34 PM MYT
PARIS, July 18 — US-European carmaker Stellantis said today it was ending production in China of its Jeep SUV after failing to acquire a majority stake in its joint venture with local firm GAC.
GAC-Stellantis is one of two joint ventures in China embarked on by Stellantis, which was formed in January 2021 last year by the merger of Fiat-Chrysler and PSA.
“Stellantis intends to cooperate with GAC Group in an orderly termination of the joint venture formed in March 2010, which has been loss-making in recent years,” the group said.
It said the move was “due to a lack of progress in the previously announced plan for Stellantis to take a majority share” in the business.
The decision to wave goodbye to GAC would show up as “a non-cash impairment charge of approximately €297 million (RM1.3 billion) in its first-half 2022 results”, due out on July 28.
Stellantis said it would henceforth “focus on distributing imported vehicles for the Jeep brand in China”.
The group — which also includes the Peugeot, Alfa Romeo and Citroen brands — had hoped to increase its stake in China Guangzhou Automobile Group (GAC) to 50-75 per cent.
The move was made possible by a change in Chinese regulations allowing deeper involvement by foreign investors, on condition they obtain Beijing’s approval.
Stellantis told AFP its decision to pull out was “not linked” to a decision by the Chinese government.
The group had announced in January that the acquisition of the hoped-for majority stake in the joint venture with GAC was the first step towards streamlining its activities in the world’s biggest vehicle market.
GAC protested at the time because the deal had not been signed.
Jeep, which is rolling out electric vehicles, was to be one of Stellantis’s main conduits for expanding in China.
The group reported sales of €152 billion in 2021 and aims to reach €200 billion in 2030.
Stellantis’s main activity in China is the manufacture and sale of Peugeots and Citroens, via a joint venture with local automaker Dongfeng.
China is also a key market for its luxury Maserati brand and a target for its premium brand DS.
Jeep sold just 20,000 vehicles in China in 2021 and at the end of last year, GAC-Stellantis terminated production at one of its two assembly lines.
Jeep is now concentrating on offering a wider array of imported electric vehicles. — AFP