The GAC-Stellantis (FCA) Chinese Joint Venture Has Filed For Bankruptcy!

Shocking News From The Dissolving Joint Venture...

Back in July, Stellantis announced that it would end its partnership with Chinese state-owned Guangzhou Automobile Group (GAC) to produce Jeep® vehicles for the Chinese market. Instead, Stellantis said it would instead focus on distributing imported electrified Jeep vehicles to China.

2022 Jeep® Grand Commander (K8) Limited 4×4. (AutoHome).

The news came as a shock to many. In less than a year, Stellantis had gone from publicly expressing that it wanted to raise its interest from 50% to 75% of the joint venture to cutting ties completely.

During its First Half 2022 Results presentation, Stellantis said it intended to cooperate with GAC Group to terminate the joint venture, which was formed in March 2010 with then Fiat Chrysler Automobiles (FCA). The presentation went on to state that in recent years, the joint venture was working at an annual loss.

2022 Jeep® Grand Commander (K8) Limited 4×4. (AutoHome).

At the time, the GAC-Stellantis joint venture was responsible for four vehicles for the Chinese marketplace:

  • Jeep Grand Commander / Grand Commander PHEV (K8) 
  • Jeep Cherokee (K4)
  • Jeep Compass (M4)
  • Jeep Renegade (BQ)

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.”

2022 Jeep® Grand Commander (K8) Limited 4×4. (AutoHome).

Stellantis CEO Carlos 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.”

Although it is one of the most recognized brands around the globe, Jeep had less than 1% of the market share for China. For the past four years, sales in China for the American SUV brand have been in a sharp decline. So much so, that sales dropped 50% in 2021 to a total of 20,396 units sold.

In 2022, Jeep sold fewer than 2,000 units thus far. With a low point of just 1 vehicle being sold in May.

2022 Jeep® Grand Commander (K8) Limited 4×4. (AutoHome).

Tavares has blamed the growing “political influence” in doing business with partners in China.

On Monday, Stellantis announced that shareholders of the GAC-Stellantis joint venture had approved a resolution authorizing the joint venture to file for bankruptcy, in a loss-making context. 

Stellantis has said it will continue providing quality services to existing and future Jeep customers in China.

Robert S. Miller

Robert S. Miller is a diehard Mopar enthusiast who lives and breathes all that is Mopar. The Michigander is not only the Editor for MoparInsiders.com, 5thGenRams.com, and HDRams.com but an automotive photographer. He is an avid fan of offshore powerboat racing, which he travels the country to take part in.

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