Stellantis joint venture with GAC to close Chinese automotive plant

September 8, 2021

The joint venture has sold only 12,288 in the first seven months this year of its Jeep-branded SUVs (Courtesy GAC FCA)

Stellantis NV’s venture with Chinese automaker GAC Group is expected to close one of its two factories in China by next March, reports Reuters. Carlos Tavares, Stellantis CEO, said the company is preparing an operational restructure in China after struggling to reach sales goals. The new strategy, scheduled for implementation by the end of the year, includes the introduction of its Opel brand, offering fully electric vehicles.

The joint venture has the capacity to make 328,000 vehicles a year, but sold only 12,288 in the first seven months this year, all Jeep-branded SUVs. Production will be transferred from Guangzhou to Changsha in order to “increase [the] utilisation rate of plants and lower cost”, as stated by GAC. The new factory reportedly has the capacity to make 164,000 vehicles a year.

As the competition accelerates in China’s automotive market, multiple joint ventures between international automakers and local partners have cut operations as a result of a decline in sales, including Mazda Motor’s venture with FAW. Hyundai Motor’s venture with BAIC sold one factory to electric vehicle maker Li Auto and, last year, Renault SA shut its venture with Dongfeng less than five years after the start of production. In 2018, Suzuki Motor exited its only Chinese venture.

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