What happens to Stellantis in China between Gac and Dongfeng
Stellantis announces the increase of its stake in the joint venture with the Chinese Gac Motor (which it later denies). Meanwhile, the Chinese auto group Dongfeng sells millions more shares of the Italian-French company
Italian-French-Dutch carmaker Stellantis intends to increase its stake in the equal joint venture with Chinese vehicle manufacturer Guangzhou Automobile Group Motor (GAC Motor).
The joint venture was created in 2010, and GAC Motor was already a partner of Fiat Chrysler Automobiles.
FROM 50 TO 75 PER CENT
Under the agreement – subject to the authorization of the Beijing authorities – Stellantis would increase its stake in the joint venture from 50 to 75 percent.
THE OBJECTIVES OF STELLANTIS
Reuters describes the move as an attempt by Stellantis, the world's fourth-largest auto maker, to cover one of its weaknesses: presence in China, the world's largest market for vehicles, including electric vehicles on which the company is aiming a lot.
Stellantis, in fact, has drawn up an investment plan of 30 billion euros by 2025 dedicated to electric mobility: it will build three battery factories in Europe and two in North America, and wants low-emission cars to represent more than 70 per one hundred of its sales in Europe and more than 40 percent in the United States. He expects to reach cost parity between a gasoline and an electric car by 2026.
ANNOUNCED ANNOUNCEMENT
After Stellantis announced its intention to increase its stake, now equal to 50%, in the joint venture in China with Guangzhou Automobile Group (GAC), the Chinese group said that the two sides have not yet signed a formal agreement, criticizing the company. European car manufacturer for issuing a statement without its approval. "The way it was released was not approved by us and GAC Group deeply regrets it," he said in a statement. "Due to the operational difficulties of GAC FCA in recent years, the shareholders of both parties of the joint venture have conducted in-depth communications and negotiations on their cooperation and on the operations of the JV and on the revitalization plan of GAC FCA – it is emphasized – As of now the two parties have not reached a formal agreement regarding the equity adjustment ". “Regarding foreign JVs and cooperation issues, the company will implement the relevant procedures in strict implementation of domestic policies and regulations and will proceed in adherence to the principles of mutual trust and win-win cooperation,” adds GAC.
PLANS FOR CHINA
However, we do not know in detail about Stellantis' plans for China. They will likely be revealed on March 1st, when the company unveils its global strategy.
Currently, its share of the Chinese auto market is very small; “Almost negligible,” writes Reuters , when compared to that of rival houses.
OBJECTIVES FOR JEEP
Last year Stellantis said it wanted to create a simplified structure to foster the development of the Jeep brand in China, in addition to the collaboration with GAC Motor.
DONGFENG SELLS (AGAIN)
Meanwhile, the Chinese auto company Dongfeng Motor plans to sell 35 million shares (1.1 percent) of Stellantis, for a value of € 665 million (€ 19 per share).
Once the sale is complete, the group will have a 3.3 per cent stake in Stellantis.
Last September Dongfeng Motor had sold another 36.1 million shares of Stellantis (1.1 percent of its stake) for around 600 million euros. The Chinese company had entered the shareholding of PSA – then merged into Stellantis through the merger with FCA – in 2014, following an operation aimed at saving the French group from bankruptcy.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/stellantis-gac-joint-venture-aumento-partecipazione/ on Thu, 27 Jan 2022 14:24:09 +0000.