Stellantis will look to raise its stake in the Chinese joint venture it operates with Guangzhou Automobile Group Co. (GAC) as it shakes up its strategy in China.
The joint venture with GAC produces the Jeep Cherokee, Renegade, Compass, and Grand Commander for China but deliveries plummeted by 45 percent to 44,026 units in 2020. This recently prompted the joint venture to announce the impending closure of the second plant that it operates.
Bloomberg reports that Stellantis wants to align its production with current levels of demand in China and will integrate its Jeep operations into the joint venture and centralize production in Changsha. Key to this strategy will see Stellantis raising its stake in the 50-50 joint venture with GAC.
China will lift its cap on foreign ownership of car manufacturers which has forced them to establish 50-50 partnerships with local automakers. BMW will make the most of these new regulations and raise its equity in its joint venture with Brilliance China Automotive Holdings from the current 50 percent to 75 percent.
No details are available regarding what additional stake Stellantis will take in the joint venture. It will come as part of a plan from Stellantis chief executive Carlos Tavares to improve its performance in the world’s biggest car market that has seen its market share slip to 0.5 percent compared with the double-digit share it has in all other regions outside Asia.