BYD and Leapmotor Eye Takeover of Changsha GAC Fick Factory
According to informed sources, Chinese automakers including Leapmotor and BYD are currently discussing the possibility of acquiring ownership of GAC Fick’s factory in Changsha, Cailian Press reported on July 22.
GAC Fick is a joint venture established by Stellantis and GAC Group in 2010, mainly producing Jeep models. According to the production and sales report disclosed by GAC, the production and sales of GAC Fick have basically stopped in the last three months.
Stellantis, owner of the Jeep brand, announced on July 18 that the company will adopt an asset-light approach to develop its Jeep brand in China. Furthermore, the company will begin negotiations with GAC to terminate the local joint venture due to a lack of progress in its previously announced plan to acquire a majority share of GAC Fick. Stellantis will then focus on the distribution of imported Jeep brand vehicles in China.
GAC Group announced on the same day that GAC Fick has been losing money in recent years and has been unable to resume normal production and operation since February this year. GAC Group and Stellantis are negotiating to terminate the joint venture in an orderly manner, assuring they will properly handle the related matters of the joint venture according to laws and regulations. The impairment of relevant assets has been confirmed in the annual financial report GAC Group last year.
Since the beginning of this year, affected by multiple factors such as the rebound of the pandemic within China, the domestic automobile market has been sluggish. The performance of the fuel passenger car market in particular is far inferior to that of new energy vehicles.
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Domestic Jeep brand vehicles are mainly fuel vehicles, and the brand power and competitiveness in the domestic market have greatly declined in recent years. It is very difficult to get back together. Perhaps due to the above considerations, Stellantis has made changes to continue to invest in GAC Fick, suspended its investment plans in China, and will only sell imported Jeep products in China in the future.
Some foreign automobile brands are no longer made in China, which is related to the rapid rise of Chinese domestic brands besides product and market factors. Young Chinese consumers are increasingly fond of Chinese domestic brand cars. On the other hand, China’s domestic brand car companies promote enterprise transformation for younger people, create new brands and new images, and launch highly competitive products that are more and more attractive to Chinese people, especially young people, so their market share is constantly increasing.