Here is Stellantis’ plan at risk in China on Jeep

Here is Stellantis' plan at risk in China on Jeep

All the aims of Stellantis in China. Facts, rumors, unknowns and scenarios

Stellantis is poised to launch a new strategy for China, the world's largest auto market, where it has struggled to sell cars.

The company born from the merger between Fiat Chrysler and the PSA group is in advanced talks with the Chinese partner Guangzhou Automobile Group Co. (Gac) to increase its stake in the equal joint venture that oversees Jeep operations in China. Bloomberg reported, citing sources close to the dossier.

The deal could close as early as next year when China's joint venture rules are relaxed, the sources said.

Additionally, according to Bloomberg , Stellantis plans to promote brands including Jeep and DS in the world's largest auto market over the next few years, and also to promote an electric Opel model.

Representatives from Stellantis and Gac declined to comment.

Since Stellantis was formed earlier this year, number one Carlos Tavares has unveiled plans for electrification and promised more details regarding the group's software plans.

In recent months, Tavares also said that the company is "doing very well" in China and that by the end of the year it will have a comprehensive strategy that includes a new "innovative" business model.

At Piazza Affari, the shares of the automotive group chaired by John Elkann rose (+ 1.4%) on a positive day for the entire automotive sector in Europe.

All the details.

STELLANTIS AIMS TO CLIMB THE JEEP JV IN CHINA

Stellantis aims to take control of the Jeep joint venture with Chinese state partner Gac, according to people familiar with the matter.

WHAT THE AUTOMOTIVE HOUSE DOES WITH GAC

The jv con Gac produces Jeep Cherokee, Renegade, Compass and Grand Commander mainly for the Chinese market.

According to one of Bloomberg's sources, deliveries of locally produced models plummeted 45% to 44,026 units in 2020.

The joint venture, which has a capacity to produce 328,000 vehicles per year, sold just 12,288 vehicles in the first seven months of this year, all of which are Jeep-branded sports vehicles.

THE “CHINESE” PROJECT OF TAVARES

As the newspaper recalls, Tavares has been promising investors for months a plan to improve the carmaker's poor performance in China. Of the 3.6 million vehicles the company sold worldwide in the first half of the year, around 50,000 were delivered in China. Its market share in the country has dropped to 0.5 percent compared to the double-digit share in all other regions outside Asia.

THE CLOSURE OF ONE OF THE TWO PLANTS

Precisely for this reason the group is trying to align its production with the disappointing levels of demand in China by centralizing production in Changsha.

As Gac announced to Reuters last week, the joint venture will close one of its two factories in China by next March.

It will then relocate production from Guangzhou to Changsha to "increase plant utilization rate and reduce costs," Gac said in a statement. The Changsha factory has the capacity to produce 164,000 vehicles per year, still far more than the company sells.

IN THE FOOTSTEPS OF BMW

Stellantis 'plan coincides with Beijing's planned loosening of joint venture rules that for decades has limited global carmakers' access to its market.

BMW also reached an agreement with Brilliance China Automotive Holdings in 2018 to increase its stake in their joint venture to 75% from the current 50%, with the transaction to be completed next year.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/ecco-il-piano-di-stellantis-a-rischio-in-cina-su-jeep/ on Tue, 14 Sep 2021 11:58:49 +0000.