GAC‑Stellantis

History

2022

Company closure

On October 31, 2022, the European company Stellantis N.V. announced the winding down of a joint venture with the Chinese Guangzhou Automobile Group (GAC Group): the reason is the unprofitability of the corresponding unit.

We are talking about the enterprise GAC-FCA (GAC Fiat Chrysler Automobiles), which was formed in March 2010. Equal shares (50:50) originally belonged to Stellantis and GAC Group, but later Stellantis announced an increase in its participation to 75%.

Stellantis failed in the Chinese market and closed a loss-making joint venture

Stellantis N.V. owns brands such as Alfa Romeo, Chrysler, Citroen, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram Trucks and Vauxhall. The joint venture with GAC Group sold Jeep Cherokee SUVs and Jeep Compass crossovers, among others. However, the demand for them has recently decreased sharply. Thus, shipments in 2021 collapsed by 50% compared to 2020 - up to 20,396 cars. And in 2022, less than 2,000 cars were sold at all.

Back in July 2022, the European company warned that it plans to focus on supplying Jeep cars to China produced outside of this country. And against the background of sharply falling sales and unprofitability, the parties are forced to report bankruptcy altogether. It is emphasized that Stellantis will continue to provide quality services to existing and future Jeep customers in China.

{{quote 'Shareholders of the GAC-FCA joint venture, Guangzhou Automobile Group and Stellantis N.V., approved a resolution allowing bankruptcy to be filed in loss-making conditions. Stellantis fully wrote off the value of joint venture investments and other related assets in its first half 2022 financial results, an official statement said^[1] }}

Plan to increase Stellantis stake to 75%

On January 27, 2022, Stellantis N.V. announced plans to increase its stake in the GAC-Stellantis joint venture from 50% to 75%. The move is a key element of Stellantis' plan to create a new base for doing business in China. GAC Group and Stellantis agreed to jointly implement the remaining formalities on the deal, which is subject to approval by the Chinese government.

GAC-Stellantis is a joint venture of China Guangzhou Automobile Group Co., Ltd. (GAC Group) and Stellantis, established in March 2010.

In September 2021, Stellantis announced the creation of a separate organization called Stellantis Jeep to develop the brand in China. Now the joint venture will be able to support the implementation of the One Jeep strategy in China, focused on the Changsha production facility, which is preparing for the release of the Compass model in January 2022. GAC Group and Stellantis will continue to work closely together and jointly develop the brand's lucrative business in China.

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