Jeep Owner Stellantis to End China Joint Venture
Stellantis
STLA 2.37%
NV said it would end the joint venture that makes and distributes its Jeep brand in China and focus instead on selling imported Jeep vehicles in the country.
The Netherlands-based car maker blamed a lack of progress in its plan to take a majority share in the joint venture with China’s
Guangzhou Automobile Group Co.
2238 1.17%
Ltd.
“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,” it said.
The decision marks a setback for Stellantis Chief Executive
Carlos Tavares,
who had planned to use the joint venture to expand the car maker’s business in China. Stellantis was forged last year through the merger of Fiat Chrysler Automobiles NV and France’s PSA Group, but both car makers have long struggled to gain a foothold in the world’s largest auto market.
Stellantis—which also owns the Chrysler, Dodge and Fiat brands—said in January that it was planning to increase its stake in the partnership with GAC to 75% from 50%. Stellantis didn’t disclose the financial terms of its planned acquisition, saying the companies were still working on the details of a deal. However, later that day, the Chinese manufacturer issued a statement saying it had learned of the announcement from the Stellantis website and that it “deeply regrets that this release is not agreed by us.”
GAC also appeared to chafe over the suggestion that Stellantis would be running the partnership. “GAC Group will strictly abide by the national policies and regulations and adhere to the principle of mutual trust and win-win,” the company said at the time.
A number of car makers, including Stellantis, have been aiming to take advantage of Beijing’s decision to loosen control of its auto industry this year.
BMW AG
has said it would pay about $4 billion to take control of its partnership with Brilliance China Automotive Holdings Ltd., while
Volkswagen AG
announced plans to increase its stake in a joint venture with China’s
JAC Motors
to 75% from 50%.
Some analysts say it is essential for Western car makers to garner majority ownership of joint ventures in China so they can make quicker decisions without months of deliberations with their Chinese partners.
On Monday, Stellantis said it would now focus on selling an electrified lineup of imported Jeep vehicles in the country.
It also said it would book a noncash impairment charge of about 297 million euros, equivalent to nearly $300 million, in its first-half results as a result of its decision.
—Cristina Roca contributed to this article.
Write to Nick Kostov at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Stellantis
STLA 2.37%
NV said it would end the joint venture that makes and distributes its Jeep brand in China and focus instead on selling imported Jeep vehicles in the country.
The Netherlands-based car maker blamed a lack of progress in its plan to take a majority share in the joint venture with China’s
Guangzhou Automobile Group Co.
2238 1.17%
Ltd.
“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,” it said.
The decision marks a setback for Stellantis Chief Executive
Carlos Tavares,
who had planned to use the joint venture to expand the car maker’s business in China. Stellantis was forged last year through the merger of Fiat Chrysler Automobiles NV and France’s PSA Group, but both car makers have long struggled to gain a foothold in the world’s largest auto market.
Stellantis—which also owns the Chrysler, Dodge and Fiat brands—said in January that it was planning to increase its stake in the partnership with GAC to 75% from 50%. Stellantis didn’t disclose the financial terms of its planned acquisition, saying the companies were still working on the details of a deal. However, later that day, the Chinese manufacturer issued a statement saying it had learned of the announcement from the Stellantis website and that it “deeply regrets that this release is not agreed by us.”
GAC also appeared to chafe over the suggestion that Stellantis would be running the partnership. “GAC Group will strictly abide by the national policies and regulations and adhere to the principle of mutual trust and win-win,” the company said at the time.
A number of car makers, including Stellantis, have been aiming to take advantage of Beijing’s decision to loosen control of its auto industry this year.
BMW AG
has said it would pay about $4 billion to take control of its partnership with Brilliance China Automotive Holdings Ltd., while
Volkswagen AG
announced plans to increase its stake in a joint venture with China’s
JAC Motors
to 75% from 50%.
Some analysts say it is essential for Western car makers to garner majority ownership of joint ventures in China so they can make quicker decisions without months of deliberations with their Chinese partners.
On Monday, Stellantis said it would now focus on selling an electrified lineup of imported Jeep vehicles in the country.
It also said it would book a noncash impairment charge of about 297 million euros, equivalent to nearly $300 million, in its first-half results as a result of its decision.
—Cristina Roca contributed to this article.
Write to Nick Kostov at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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