Jeep Is Closing Its Only Factory in China

Jeep Is Closing Its Only Factory in China

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Photo: Jengtingchen via Wikimedia Commons

Stellanis shut up alone Jeep factory in China the largest automotive market in the world. This is believed to be due to increased interference from local politicians.

According BloombergThe automaker is implementing an “asset-light” strategy in China amid fears that rising political tensions between that country and the rest of the world could lead to sanctions.

“We have seen in recent years more and more political interference in the business world in China,” said Carlos Tavares, CEO of Stellantis, told Bloomberg. “We don’t want to be cross-sanctioned as has been the case for other companies in other parts of the world recently.”

Last week, the company announced it was ending a 12-year manufacturing partnership with state-owned Canton Automotive Group. These comments from Tavares certainly give more context to this decision.

Another reason to leave? Tavares pointed out that German and U.S-Sales of branded vehicles fell by about a fifth in China during the first half of 2022. There was also a double-digit decline for Japanese brands. Meanwhile, domestic Chinese companies have seen their sales rise over the same period.

“We are seeing that for Western players, selling cars in China is getting harder and harder,” he told reporters. “There is an absolutely major shift in the Chinese market.”

He went on to say that Jeep’s China venture was racking up losses, but the decision to leave was rooted in a “broken trust” with Guangzhou and the Chinese Communist Party, which had economic policies that strongly favored domestic auto companies. .

Tavares says GAC didn’t do what it was ‘supposed to do’ when Stellantis signed a deal increasing its stake in the joint venture that produced the Jeep Cherokee, Renegade, Compass and Grand Commander (a Chinese-only model).

Stellantis is not completely removing Jeep from China; instead, the company will ship a range of electric vehicles from different Jeeps to dealerships nationwide.

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