As China makes moves to become more economically self-sufficient, very few foreign automakers even have a stake in the world’s largest automotive market
. It came as quite a shock to the industry when Jeep
parent company Stellantis announced that it was shutting down its only Chinese plant
for good. Representatives for Stellantis blamed the shutdown on a failure to agree on new partnership terms that would give the European-owned automaker an advantage, but new comments from the state-owned Chinese partner imply that there was more to the story.
Read on with the car ownership experts at Jerry to learn why Stellantis is now under fire for statements made on the split.
Guangzhou Automobile Group fires back at Stellantis
In a deal that is becoming increasingly rare for Chinese commerce, the Jeep production facility in China was 50/50 a joint venture between European automaker Stellantis and state-owned Guangzhou Automobile Group (also known as GAC Group).
According to Bloomberg
, comments made by Stellantis executives about the split led to a back-and-forth between the two automotive giants. Rather than a failure to meet partnership agreements, GAC Group said that Jeep “failed to achieve success” in Chinese markets due to “a lack of respect for customers.”
GAC Group went on to say that the joint venture “has not been able to establish a mutually trustworthy operating mechanism adapted to the highly competitive environment in China in order to turn the adverse situation of continuous losses in recent years.”
What Stellantis had to say
Jeep has been suffering losses in the Chinese automotive market, but Stellantis CEO said that the real issue went deeper than poor sales or disappointing customer service, as GAC Group implied.
Tavares cited “broken trust” between the companies as the ultimate reasoning for pulling out. The rejected new deal would have raised Stellantis’ stake in the joint venture to 75%.
In an economic and political climate where Chinese officials are looking to divest from foreign businesses, it makes sense that the state-owned company would be reticent to sign an agreement that would cut its ownership of a domestic plant in half.
MORE: Can Stellantis' New $4 Billion EV Battery Plant Help Kickstart a New Supply Chain?
Saving money in uncertain times
Only time will tell if pulling out of the joint venture will work out for Stellantis, but Chinese consumers that do favor a Jeep may have a slightly harder time getting one in the future.
When geopolitical tensions play out in the marketplace, consumers can end up paying the price in inflation, high gas prices, and increased insurance premiums. To get the best deal on insurance rates all the time, try using the Jerry
app. A licensed broker, Jerry can source quotes from 55+ top insurance companies in less than 60 seconds. That’s right, in under a minute you’ll see offers from Travelers, Progressive, and more! The average user saves over $800 per year on car insurance.
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