Stellantis and GAC file for bankruptcy of their Chinese joint venture

Stellantis and GAC file for bankruptcy of their Chinese joint venture

The joint venture between Stellantis and GAC, which produced Jeeps, is no more. The two partners filed for the balance sheet of the structure. The epilogue of negotiations that did not succeed, against the backdrop of the reorganization of activities in China.

In 2016, joint venture partners FCA and GAC introduced the China-produced Jeep Compass.

After having announced the end of its joint venture with GAC, in July 2022, Stellantis and its Chinese partner filed for bankruptcy for the structure that produced Jeep. The announcement was made on Monday, October 31, 2022, as Stellantis reviews its strategy in the country.

Stellantis and Guangzhou Automobile Group Co (GAC) have “approved a resolution authorizing [leur] joint venture to file for bankruptcy“, indicated in a press release the group with 14 brands, evoking a “deficit context“.

GAC for its part specified that this decision of the shareholders had been taken unanimously. The joint venture manufactured Jeep vehicles. “Stellantis will continue to provide quality services to current and future Jeep brand customers by China“, nevertheless reassured the European manufacturer.

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Jeep, which is being electrified, is one of the main avenues of development in China for the group, which is aiming for 20 billion euros in turnover there by 2030.

Foreign brands have to deal with regulatory constraints and a multitude of local players who have gained in competitiveness, particularly in the electric market.

Earlier this month, Stellantis CEO, Carlos Tavareswarned that his group could eventually no longer produce cars in China, depending on the turn taken by its negotiations with its local partners. But he would continue to market them in this country.

Stellantis is currently discussing with its partner Dongfeng the future of Peugeot and Citroën in the world’s largest market, where the group has never managed to break through, while Volkswagen sold more than 3 million cars there in 2021. (with AFP)