Stellantis Ends Its Manufacturing Joint Venture In China
Stop us if you’ve heard this one before, but another U.S. manufacturer is calling it quits on a joint venture in China.
Stellantis, the auto maker responsible for mainstays such as Dodge Ram pickup trucks, said that a “lack of progress” has caused it to abandon its joint venture with China’s Guangzhou Automobile Group Co. Ltd.
The company is instead going to focus on importing vehicles to the country instead of manufacturing them there, the Wall Street Journal noted this week. Stellantis also has a joint venture in China with Dongfeng, to manufacture Peugeot and Citroën brands.
Dongfeng Motor Group Co. Ltd. said recently it planned on selling its 3.16% stake in Stellantis, the Journal reported.
The company commented: “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.”
JV’s in China haven’t been easy for foreign manufacturers while local brands have flourished, the report says. Chinese domestic-brand vehicles saw sales up 18% during the first half of 2022, despite the country’s Covid lockdowns. Foreign JVs saw sales fall 6% over the same time.
At the beginning of this year, Stellantis had previously planned to increase its stake in its partnership with GAC to 75% from 50%, the report says. GAC snubbed Stellantis the day they announced their intention, putting out a statement that said it “deeply regrets that this release is not agreed by us.”
Chief Executive Officer of Stellantis Carlos Tavares has cited geopolitical risk as a reason “not to over-invest in China, particularly in owning factories,” the Journal wrote.
Tue, 07/19/2022 – 19:05