Photo: Jeep
Global automaker Stellantis announced on Monday that it will terminate the money-losing joint venture it had with Guangzhou Automobile Group (GAC Group) in China to build Jeeps overseas. Stellantis has motivated the decision by citing a “lack of progress” in the previously announced plan to acquire a majority stake in the joint venture.
The surprising news comes just four months after the carmaker revealed plans to raise its stake in the business from 50% to 75%. It seems the plans did not come to fruition after all, and the two entities decided to part ways after more than a decade.
Surprising as it might be, the news does not mean Stellantis is out of China for good. It only means the Jeeps will stop being produced in China. The automaker will continue to operate in China through its dealer network, so it will start importing its electrified Jeep offerings to the country.
“Due to a lack of progress in the previously announced plan for Stellantis to take a majority share of the GAC-Stellantis joint venture, Stellantis N.V. today announced its plan to focus on distributing imported vehicles for the Jeep brand in China to leverage the potential of the brand and its iconic products through an asset-light approach,” said the company.
According to the press release, Stellantis recognizes a non-cash impairment charge of approximately €297 million (~$302 million) in the results for the first half of 2022 in order to terminate the GAC Group joint venture in an orderly fashion.
GAC FCA currently has two production plants, one in Changsha and the other in Guangzhou, where it makes the Jeep Renegade, Compass, Cherokee, as well as the Grand Commander, the latter of which was designed and produced exclusively in China.
After manufacturing at the China plants ceases, Jeep will become an import-only brand in the Middle Kingdom. For buyers, sadly, this means price increases for Jeep models, due to high import tariffs.
Surprising as it might be, the news does not mean Stellantis is out of China for good. It only means the Jeeps will stop being produced in China. The automaker will continue to operate in China through its dealer network, so it will start importing its electrified Jeep offerings to the country.
“Due to a lack of progress in the previously announced plan for Stellantis to take a majority share of the GAC-Stellantis joint venture, Stellantis N.V. today announced its plan to focus on distributing imported vehicles for the Jeep brand in China to leverage the potential of the brand and its iconic products through an asset-light approach,” said the company.
According to the press release, Stellantis recognizes a non-cash impairment charge of approximately €297 million (~$302 million) in the results for the first half of 2022 in order to terminate the GAC Group joint venture in an orderly fashion.
GAC FCA currently has two production plants, one in Changsha and the other in Guangzhou, where it makes the Jeep Renegade, Compass, Cherokee, as well as the Grand Commander, the latter of which was designed and produced exclusively in China.
After manufacturing at the China plants ceases, Jeep will become an import-only brand in the Middle Kingdom. For buyers, sadly, this means price increases for Jeep models, due to high import tariffs.
Google News