Stellantis ends Jeep production in China over failed stake buy

PARIS: American-European carmaker Stellantis said on Monday it was ending production of its Jeep sports utility vehicle (SUV) in China after failing to acquire a majority stake in its joint venture with Guangzhou Automobile Group (GAC).

The joint venture is one of two embarked on in the East Asian country by Stellantis, which was formed in January 2021 after Fiat-Chrysler and PSA merged.

"Stellantis intends to cooperate with [the] 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.

The move was "due to a lack of progress in the previously announced plan for Stellantis to take a majority share" in the business, it added.

The decision would show up as "a noncash impairment charge of approximately 297 million euros ($302 million) 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," it added.

The group — which also includes the Peugeot, Alfa Romeo and Citroen brands — had hoped to increase its stake in GAC from 50 percent to 75 percent.

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 Agence France-Presse (AFP) that its decision to pull out was "not linked" to a decision by the Chinese government.

The group announced in January that the acquisition of the hoped-for majority stake in the joint venture was the first step toward 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' main conduits for expanding in China.

The group reported 152 billion euros ($154 billion) in sales in 2021 and aims to reach 200 billion euros in 2030.

Stellantis' main activity in China is the production and sale of Peugeots and Citroens units 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. 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.

Source: TheManila Times