PARIS (Reuters) – Stellantis announced the “orderly termination” of its loss-making joint venture with Chinese carmaker GAC, which has been producing Jeep vehicles since 2010, after it failed in its attempt to take control of the business.
Stellantis will recognize a non-cash impairment of around 297 million euros ($299.5 million) for its first half-year results, the company said.
Several joint ventures between international automakers and local partners have come under pressure in China, where competition has been heating up while lockdowns in response to the COVID-19 pandemic have also impacted production and sales.
Stellantis had previously announced its intention to take a 75% stake in the joint business with GAC in January – a plan that was immediately rebuked by its Chinese counterpart.
Stellantis on Monday blamed the end of the partnership on a “lack of progress” regarding those plans.
“The Jeep brand will continue to strengthen its product offering in China with an enhanced electrified line-up of imported vehicles meant to exceed Chinese customer expectations,” Stellantis added.
China has been a weak spot for Stellantis – the world’s fourth-biggest carmaker – where Stellantis has had a market share of less than 1%.
($1 = 0.9918 euros)
(Reporting by Tassilo Hummel; Editing by Sudip Kar-Gupta)