Stellantis, a multinational automotive manufacturer, announced on July 18 that the company will adopt an asset-light approach to develop its Jeep brand in China.
Further, the company will begin negotiations with Chinese vehicle maker GAC to terminate their local joint venture named GAC FCA due to a lack of progress in its previously announced plan to acquire a majority share of the joint venture.
Stellantis is an automaker formed by the merger of PSA Group and Fiat Chrysler Automobiles (FCA) with a 50:50 share ratio. Stellantis said that it will continue to strengthen the supply of Jeep brand products in China and enhance the electrification lineup of imported cars.
GAC FCA is a joint venture owned by Stellantis and GAC, which was established in March 2010. Its domestic models include products such as Compass, Grand Commander, Cherokee, Freeman and Commander of the Jeep brand. The power system covers fuel and plug-in hybrid powertrain products, and the main products are sold in the range of 150,000 yuan ($22,260) to 300,000 yuan ($44,520).
Stellantis plans to terminate GAC FCA in an orderly manner, which has been loss-making in recent years and will recognize a non-cash impairment charge of approximately €297 million ($301.4 million) in the first half of 2022.
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On January 27 this year, Stellantis announced that it plans to increase the shareholding ratio of GAC FCA from 50% to 75%. Subsequently, GAC responded that both parties had not signed a formal agreement on the equity adjustment. According to GAC, in June, the output and sales volume of GAC FCA were both nil. From January to June this year, GAC FCA produced 822 vehicles and sold 1,861 vehicles, down 89.35% and 84.18% year-on-year respectively.