Stellantis ends joint venture with GAC in China

STELLANTIS ENDS JOINT VENTURE WITH GAC IN CHINA PARIS (Reuters) – Automaker Stellantis said on Monday it would carry out an “orderly shutdown” of its joint venture with China’s GAC, which has been producing and distributing Jeeps since 2010, after failing in his bid to take control of the company. Due to the termination of this joint venture, which has been loss-making in recent years, the automotive group will recognize a non-cash impairment charge of around 297 million euros in its results for the first half of 2022. The Stellantis share on the Milan Stock Exchange and Paris was up just over 1% in early trading. Several joint ventures between international automakers and local partners are under pressure in China, where competition has intensified while shutdowns in response to COVID-19 have also affected production and sales. Stellantis had announced in January its intention to take a 75% stake in the joint venture with GAC – a plan which was immediately rejected by its Chinese counterpart. The manufacturer attributed the end of the partnership to a “lack of progress” on these plans. “The Jeep brand will continue to strengthen its vehicle offering in China with an enhanced lineup of imported electrified vehicles, set to exceed the expectations of Chinese customers,” Stellantis added. With a market share of less than 1%, China remains a weak point for the world’s fourth largest automaker, born last year from the merger of Fiat Chrysler and PSA. (Tassilo Hummel and Myriam Rivet report, French version Elena Vardon; editing by Kate Entringer)