Jeep maker Stellantis NV's money-losing joint venture in China is filing for bankruptcy following its decision to dissolve the partnership and import its SUVs into the country.
Stellantis in January had said it intended to increase its share in the 50-50 partnership formed with Guangzhou Automobile Group Co. Ltd. in 2010 to 75%. The announcement caused a rift with GAC, which said it didn't know about Stellantis' plans to announce the ownership modifications, and because of slow progress on the negotiations and political influences, Stellantis reversed course in July, saying it would end the collaboration and no longer build Jeeps in China.
Stellantis in a statement on Monday said it will continue to provide service to existing and future Jeep customers in the country. The fully impaired value of its investment in the joint venture and related assets — which it previously placed around $294 million (297 million euro) — appeared in its financial results from the first half of 2022. Stellantis reports third-quarter revenue and shipments on Thursday.
Stellantis CEO Carlos Tavares has said the company is pursuing an "asset-light" approach in the country as Chinese manufacturers gain dominance in the electric-vehicle market, and Stellantis' brands struggle to make ground. He said at the Paris Motor Show this month that Stellantis could end manufacturing in the country, including of Peugeot and Citroën vehicles, which it builds in partnership with Dongfeng Motor Corp. Stellantis seeks $22 billion in net revenue by 2030 in China.
Foreign automakers' share of China's automobile sales decreased almost 5 percentage points last year to about 46%, according to the China Passenger Car Association. Stellantis' joint venture with GAC made up a sliver. After a significant decline in sales over the past four years, it had sold fewer than 2,000 vehicles in 2022. In May, it sold one Jeep.
Jeep's roots in China date to its days with American Motors Corp. in 1984, when it formed a Beijing Jeep joint venture. It was one of the earliest deals for vehicle production in China by a foreign brand.
