Joint venture Guangzhou Automobile Group (GAC) and Stellantis which manufactures Jeep in China have recently announced that they will file for bankruptcy. The move comes after Stellantis' decision in July to end the joint-venture with GAC, only months after saying it would raise its stake from 50% to 75%.
Sales of Jeep Cherokee and Jeep Compass in China have been in sharp decline for the past four years. Sales plunged 50% in 2021 from the previous year to 20,396 vehicles. For 2022, it has sold fewer than 2,000 vehicles.
Stellantis could possibly cease production activities in China and this could affect Citroen, Peugeot and other brands that the company represents in China.
Foreign auto manufacturers have seen mounting pressures as the market is swiftly shifting to electric vehicles and local consumers favoring their own national brands. According to China Passenger Car Association, foreign manufacturers' share of China's auto market dropped 5.5 percentage points last year to 45.6%.