Stellantis joint venture with China’s GAC to close one of two plants

BEIJING (Reuters) -Stellantis NV’s Chinese joint venture with GAC will close one of its two factories in China by next March, GAC told Reuters, as Stellantis restructures operations in the world’s biggest auto market where it has struggled to sell cars.

The joint venture, which currently has capacity to make 328,000 vehicles a year, sold only 12,288 in the first seven months this year, all Jeep-branded sport-utility vehicles.

It will transfer production from Guangzhou to Changsha to “increase (the) utilisation rate of plants and lower cost”, GAC said in a statement. The Changsha factory has annual manufacturing capacity for 164,000 vehicles, still far more than the joint venture sells.

The joint venture was launched by GAC and FCA, which merged with PSA to become Stellantis. A Stellantis spokesperson declined to comment.

As well as the GAC partnership, Stellantis also operates a joint venture in China with Dongfeng Motor Group, which sold 47,788 cars between January and July.

As competition heats up in China, where over 25 million vehicles were sold last year, several joint ventures between international automakers and local partners cut operations due to declining sales.

Mazda Motor (OTC:) ended its joint venture with FAW last month, and Hyundai Motor’s tie-up with BAIC has sold one factory to electric vehicle maker Li Auto.

Last year, Renault SA (OTC:) shut its venture with Dongfeng less than five years after they started production. In 2018, Suzuki Motor exited its only Chinese joint venture with Changan.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.