Search CarGuide.PH

Tuesday, November 1, 2022

Jeep's China Joint-Venture Files For Bankruptcy


The venture between Stellantis and Guangzhou Automobile Group (GAC) producing Jeep vehicles in China will file for bankruptcy, the companies said.

Stellantis, the parent company of Jeep, said it had fully impaired the value of its investment in the joint venture in its results for the first half of 2022. It also said it would continue to provide service to Jeep customers in China.

Meanwhile, GAC, which approved the bankruptcy filing, said the joint venture had liabilities of almost 111 percent of its assets of 7.3 billion yuan (around 1 billion US dollars). The bankruptcy would not have a significant impact on GAC’s operations, the Chinese company said.


In the following days, GAC criticized Stellantis and said it was “deeply shocked” by comments from the European automaker about the end of their joint venture in China.

Sales for the venture, which sold the Jeep Cherokee and Compass in China (they were subsequently exported to the Philippines in 2020), have been in sharp decline for the past four years. Volume fell by 50 percent in 2021 from the previous year to 20,396 vehicles.

For 2022, the JV sold fewer than 2,000 vehicles. In May, it reported selling only a single vehicle.

Foreign automakers as a group have been under growing pressure in China, where the market has shifted quickly to battery electric vehicles (BEVs) and domestic brands have been taking market share.

Foreign automakers saw their share of China’s auto market, now the world’s largest, drop by 5.5 percentage points last year, to 45.6 percent, according to the China Passenger Car Association.

The JV model, which China had insisted on as a condition of investment by foreign automakers, is under threat, said Chee-Kiang Lim, managing director China at Detroit-based consultancy Urban Science.

“The JV policy was originally designed to compel foreign brands to share their brands and technology with local Chinese (automakers) in exchange for access to China’s large, growing auto market,” he said.

Now that Chinese automakers are more “confident that they have closed the gaps with or even surpassed their foreign partners,” he said, “we have to expect more JVs to unwind in the coming years.”

Currently, Tesla is the only global automaker that was granted a waiver to produce cars in China without a joint venture.

With report from Reuters

4 comments:

  1. Build those Jeep in America instead of China.

    ReplyDelete
    Replies
    1. Renegade is actually made in Europe while there's a plant that manufactures Jeep Meridian and Jeep Compass SUVs in India.🤣Jeep Wrangler will be manufactured in Malaysia for SEA region.

      Delete
  2. Jeep Grand Commander,Compass and Renegade aren't that popular in China due to its reliability issues and being expensive..Chinese car buyers would rather buy Japanese and domestic brand SUVs.

    ReplyDelete
    Replies
    1. Where did you get that data? Can you show it to us?

      Delete

Feel free to leave your comment or share your views. Comments that are derogatory and/or spam will not be tolerated. We reserve the right to moderate and/or remove these comments.