Jeep Terminates Partnership With GAC, Pulls Out Of China Over Government Interference

Stellantis NV-owned US automaker, Jeep, closes its only plant in China citing Government’s Interference in business.

Jeep terminated a 12-year manufacturing partnership with state-owned Guangzhou Automobile Group (GAC).

Jeep-GAC venture had produced the Cherokee, Renegade, Compass and Grand Commander models primarily for the China market.

It noted that the sales of German and US-branded vehicle fell by about a fifth in China during the first half of the year.

Stellantis will now ship an electrified lineup of different Jeep vehicles to its dealers in the country.

Stellantis NV, formerly Fiat Chrysler, has shuttered its only Jeep factory in China, terminating a 12-year manufacturing partnership with state-owned Guangzhou Automobile Group (GAC), citing politicians interference in the world’s biggest car market.

Before now, the Jeep-GAC venture had produced the Jeep Cherokee, Renegade, Compass and Grand Commander models primarily for the China market.

In an interview with Bloomberg Television, Chief Executive Officer Carlos Tavares said the carmaker is implementing an “asset-light” strategy in the country, amid rising political tensions between China and the rest of the world.

“We have been seeing over the last few years more and more political interference in the world of business in China,”

“We don’t want to be a victim of cross-sanctions as has been the case for other companies in other regions of the world recently.”

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Carmakers are taking into account what happened with the war in Ukraine, fearing a similar sanctions imposed on Russia could apply to China if the country were to assert itself in Taiwan.

Tavares noted that the sales of German and US-branded vehicle fell by about a fifth in China during the first half of the year, while sales of local companies, including BYD Co., Geely and Nio , rose.

“We see that for Western players, selling cars in China is becoming increasingly difficult,” he told reporters at a press conference.

“There is an absolutely major shift in the Chinese market.”

“We have two big competitors, Volkswagen and GM, who are very present in China,” Tavares added. “I wouldn’t want to be in their place.”

While Stellantis had signed a deal to raise its stake in the GAC joint venture to 75%, Tavares said GAC “did not do what it was supposed to do,”, adding that “So we considered that it was better to unwind.”

Stellantis will now ship an electrified lineup of different Jeep vehicles to its dealers in the country, after shutting its only Jeep factory in the world’s biggest car market.

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