Stellantis Joint Venture in China Filing for Bankruptcy Due to Plunging Vehicle Sales, Company Says

European carmaker Stellantis has announced that its joint venture (JV) in China is filing for bankruptcy following poor vehicle sales over the years.

The JV, which sold the Jeep Cherokee SUV and the Jeep Compass crossover SUV in China, saw sales decline significantly during the past year.

In 2021, sales crashed by 50 percent to about 20,400 vehicles. In 2022, sales have fallen even further, with less than 2,000 vehicles being sold. In the month of May, only a single sale took place.

The company terminated its JV with Guangzhou Automobile in July, mere months after it had announced plans to raise its stake in the partnership from 50 to 75 percent.

Stellantis CEO Carlos Tavares blamed its Chinese partner for not wanting to abide by the Memorandum of Understanding signed by the two parties.

Instead, Guangzhou Automobile “preferred to be in breach, rather than execute it,” Tavares said at the time, according to Reuters. He also pointed out that the “political influence” of doing business in China was growing day by day.

China Exit, Unequal Treatment of Carmakers

While attending the Paris Motor Show on Oct. 17, Tavares stated that Stellantis is considering fully pulling out from China given the geopolitical tensions popping up across the world.

Since the company is already selling Jeep and Alfa Romeo vehicles made outside China inside the Asian nation “very profitably,” Stellantis might not need any factories in China if the company sticks with such a strategy, Tavares said, according to French public radio station RFI.

The Stellantis CEO also complained about how Europe is rolling out “red carpet” for Chinese manufacturers while the same treatment is not being extended to European manufacturers in China. Tavares supports taxing Chinese vehicle imports the same way Western vehicles are taxed in China.

In an interview with Bloomberg, Laurens van den Acker, director of design for Renault group, called the situation “disturbing.”

“I root for Europe. I want it to be us taking the leadership. Chinese carmakers have an advantage over us, and the Chinese government has been betting on the EVs for 15 years,” van den Acker said.

Some European nations are taking measures to protect the domestic industry. For instance, France is preparing a measure that will provide subsidies to electric vehicles that are only manufactured in France or in other parts of Europe.

From The Epoch Times

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