Initially, it planned to boost its stake in the GAC Jeep venture.
GAC will end local Jeep production shortly.
Jeep is one of if not the most recognized auto brands in the world. On the strength of its name alone, Stellantis delivers hundreds of thousands of new vehicles every year and there’s still plenty of room to grow. And growth in China was Stellantis’ plan until very recently.
In January of 2022, Stellantis announced that it was looking to increase its existing stake in GAC Jeep in China from 50% to 75%. The goal was to increase its ties with GAC and make more money via the Jeep brand’s profitable business outlook.
Unfortunately for Stellantis, due to a lack of progress in the previously announced plan with GAC, the automaker will focus on distributing imported vehicles for the Jeep brand in China to leverage the potential of the brand and its iconic products through an asset-light approach.
This implies that GAC will thus have to terminate local Jeep production however there will be an impairment charge of approximately €297 million ($302 million USD) in the first half of 2022 results to be paid by Stellantis.
The asset-light approach will involve electrified 4xe Jeep models which will be sold via experienced Chinese Jeep dealers.
Back in March, Stellantis had outlined plans to increase its revenues in China to $20 billion euros annually by building its Jeep presence along with its existing Peugeot and Citroen brands. They are still a long way off as they sold only 125,000 new Jeeps there last year and held a sub-1% market share.