Stellantis Decides to Liquidate Joint Venture with Guangzhou Automobile in China

[Photo by AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] European automaker Stellantis has decided to bankrupt its joint venture with China’s Guangzhou Automobile Group (GAC), GAC Fiat Chrysler, Bloomberg reported on the 31st (local time).

Stellantis issued a statement on the same day announcing that both Stellantis and Guangzhou Automobile Group approved the bankruptcy of GAC Fiat Chrysler. Bloomberg explained that this decision further increases the likelihood that Stellantis will cease automobile production in China.

Earlier, in July, Stellantis ended its cooperation with Guangzhou Automobile Group and stopped Jeep production in China. GAC Fiat Chrysler produced Jeep Cherokee SUVs and Compass crossover vehicles in China.

At the earnings announcement in July, Stellantis CEO Carlos Tavares pointed out that the political influence on the China business had increased over the past five years. At that time, he said that even if the joint venture contract was terminated, it would not have a significant long-term impact on Stellantis. Earlier this month, CEO Tavares also indicated that production of Peugeot and Citro?n in China might be halted.

Over the past four years, sales of GAC Fiat Chrysler in China have sharply declined. Last year’s sales were 20,396 units, a 50% decrease compared to 2020. This year’s sales are expected to be less than 2,000 units.

A representative from Urban Science, a consulting firm based in Detroit, USA, predicted that more joint ventures between foreign automakers and Chinese automakers will be liquidated in the future. He explained that joint ventures were policies forcing foreign automakers to share brands and technology, but recently Chinese automakers have narrowed or even surpassed the gap with their foreign partners.

According to the China Association of Automobile Manufacturers, the market share of foreign automakers in China last year was 45.6%, down 5.5 percentage points from 2020.

Stellantis is an automotive group formed in 2021 by the merger of Italy’s Fiat, which acquired the American car brand Chrysler, and the French automaker Peugeot. GAC Fiat Chrysler is a joint venture established in 2010 by Fiat Chrysler in cooperation with Guangzhou Automobile Group.

This content was produced with the assistance of AI translation services.