Stellantis, the Gac joint venture with the Chinese applies for bankruptcy – Corriere.it

Last episode of the Chinese saga of Stellantis. The shareholders of the Gac-FCA joint venture – Guangzhou Automobile Group and Stellantis – have approved a resolution that, following large losses, will allow them to file for bankruptcy. The Italian-French group had fully written down its stake in the joint venture and its other related activities in the first half of 2022 for 297 million euros. The big car manufacturer will no longer produce Jeeps but will distribute them through its own network, indeed in the next few days a product plan will be presented that will illustrate the details of the models available in China. The marketing model will follow the one that has already borne fruit with the premium Alfa and Maserati cars. According to the China Passenger Car Association, foreign automakers saw their share of China’s auto market, now the largest in the world, drop by 5.5 percentage points to 45.6 percent last year. The joint venture model, which China had insisted on as a condition for foreign carmakers’ investments, is in jeopardy, said Chee-Kiang Lim, general manager for China of Detroit-based consultancy Urban Science.

Joint ventures don’t work in China

The joint venture policy was originally designed to force foreign brands to share their brands and technology with local Chinese automakers in exchange for access to China’s large and growing auto market, he said. Now that Chinese automakers are more confident that they have bridged the gap with their foreign partners or even bridged them, he added, we must expect more joint ventures to dissolve in the coming years. The divorce was announced in July, putting an end to a partnership born in 2010 with Fiat Chrysler Automobiles and in which the same CEO of Stellantis, Carlos Tavares, seemed to believe given that at the beginning of the year he had spread the news that he wanted to take the majority of Gac. All cleared. So much so that at the Paris Motor Show, Tavares had made clear the position of the group towards the business in the former Celestial Empire. We are the third largest car manufacturer in the world in terms of revenues and profitability, our presence in the marginal country and we can be sustainable without the Chinese market, said Tavares, adding that Stellantis will continue to be present “in the Asian market. I think we should ask the EU to strengthen the European market in front of Chinese producers, he later said. We want the same conditions to compete. We should compete by the same rules in Europe too, while in China not so, he added, because it should be easy for the Chinese to come to us, when we Europeans face great difficulties when we enter the Chinese market, he wondered rhetorically. Tavares stressed that we do not want the arrival of Chinese producers in Europe to create the situation that low cost airlines have caused in Europe: they have killed flag carriers and then costs have risen.