Two weeks ago, Stellantis announced that it would end its partnership with the Chinese state-owned Guangzhou Automobile Group (GAC) to produce vehicles for the Chinese market. Instead, Stellantis said it would focus on distributing imported Jeep brand vehicles made up of enhanced electrified offerings.
Since then, GAC has fired back at Stellantis saying that it is “disrespecting customers” and being a trustworthy partner. The Chinese company also lashed out about comments made by Stellantis CEO Carlos Tavares and the “broken trust” between the two companies.
Tavares made it known that GAC did not want to abide by the binding memorandum of understanding that the two companies had signed. Tavares went on to say that GAC “preferred to be in breach, rather than execute it.” So the automaker “took the conclusion that of course trust was broken.”
Earlier this year, Stellantis did sign a deal to raise its state in the joint venture with GAC to 75%. However, GAC “did not do what it was supposed to do,” Tavares said. “So we consider it was better to unwind”.
In a statement, GAC Group said that Stellantis “failed to achieve success, which is the result of a lack of respect for customers in the Chinese automobile market”. The statement also included that the joint venture “has not been able to establish a mutually trustworthy operating mechanism adapted to the highly competitive environment in China in order to turn the adverse situation of continuous losses in recent years.”
The GAC-Stellantis joint venture produced four vehicles for the Chinese market…
- Jeep Grand Commander (K8) / Grand Commander PHEV (2018 to Present) – Changsha Assembly Plant
- Jeep Cherokee (K4) (2015 to Present) – Changsha Assembly Plant
- Jeep Compass (M4) (2016 to Present) – Guangzhou Assembly Plant
- Jeep Renegade (BQ) (2016 to Present) – Guangzhou Assembly Plant
Currently, the Jeep brand has less than 1% market share in China. For the past several years, Stellantis (and its former FCA identity) has been trying to reevaluate the brand’s position in the country.
During its Dare Forward 2030 presentation, Stellantis stated it would adopt an “asset-light” business model in China, still aiming to increase revenue but via imports rather than domestic production. This means vehicles like the upcoming Jeep Junior or Jeepster (JJ) battery-electric vehicle (BEV) could play an important role in the market. Currently, Jeep imports the Wrangler (JL), Gladiator (JT), and Grand Cherokee (WK2) to its dealers there.
2022 Jeep® Grand Commander (K8) Limited 4×4 Image Gallery:
Photos from AutoHome YouTube channel.