Stelantis will officially exit the world’s largest car market after weeks of speculation and reports of plans to halt production in China. Stellantis is in a joint venture with Guangzhou Automobile Group Company (GAC), and Guangzhou Automobile Group Company (GAC) to manufacture Jeep vehicles in the country. But in recent times it has become very difficult to walk.
Stelantis had already terminated the joint venture with GAC earlier this year after being unable to take a controlling stake. Stelantis CEO Carlos Tavares pointed to geopolitical tensions as one of the reasons for the current situation. After which the GAC had given a scathing reprimand and had spoken of giving a ‘deep blow’. Sales have been declining for almost four years and models like the Cherokee and Compass have failed to woo customers. Although Stellantis is one of the oldest foreign companies to enter the Chinese market, increasing competition from local manufacturers is adding to the heat of the market.
For now, Stellantis has informed via a press statement that it will continue to serve the existing Jeep customers in the country. Also, according to a Reuters report, GAC highlights the joint venture, with liabilities accounting for about 111 percent of its assets of 7.3 billion yuan ($1 billion). But Stalantis’ filing for bankruptcy won’t affect its own operations.
But while GAC is not seeing much impact on its operations, the road ahead is not smooth to compete with foreign brands. According to the China Passenger Car Association, the share of foreign automakers in the Chinese market fell by 5.5 percent last year to 45.6 percent.
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