GAC-FCA JV to File for Bankruptcy

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Shareholders of the GAC-FCA Joint Venture, Automobile Group Co., Ltd. and Stellantis N.V., have approved a resolution authorizing the JV to file for bankruptcy, in a loss-making context. Stellantis fully impaired the value of its investment in the GAC-FCA JV and other related assets in its first half 2022 financial results. Stellantis will continue providing services to existing and future Jeep® brand customers in China,” Stellantis (NYSE / MTA / Euronext Paris: STLA) said in a statement this morning.  

Stellantis, the mega-merger between FCA and PSA, said last July that the “lack of progress in the previously announced plan for Stellantis to take a majority share in their joint venture” has resulted in the GAC Group and Stellantis to start figure out how to terminate the joint-venture that produces and distributes Jeep products in China. (read AutoInformed.com on: Tilt! Stellantis and GAC to Stop Jeep China JV )

The Jeep brand’s Wrangler model had record Chinese sales in 2021 but overall Jeep sales of 20,357 (-49%) declined for the fourth straight year. The Jeep product lineup, however, was recognized as No. 1 in APEAL and Vehicle Dependability (VDS) and No.2 in Initial Quality (IQS) by JD Power’s study among mainstream brands in China.

The Jeep brand will continue to strengthen its product offering in China with an enhanced electrified line-up of imported vehicles. Stellantis has dubbed this an asset-light approach. (AutoInformed: Stellantis Doubles China Sales, Bolsters and Consolidates Aftermarket as Jeep Sales Plunge)