Stellantis says it'll increase share of China JV to boost Jeep, but partner says it didn't agree

Breana Noble
The Detroit News

The maker of Jeep said on Thursday it will take majority ownership in its joint venture with one of its Chinese automaker partners in an effort to boost the SUV brand in a market particularly hungry for them.

But Guangzhou Automobile Group Co. Ltd. said it didn't know about the plans.

Stellantis NV says it will increase its share to 75% from 50% in the business with GAC. As Stellantis seeks to turn around its money-losing operations and grow its roughly 0.5% share in the world's largest automotive market, this would give the transatlantic automaker greater control of the partnership and a greater ability to profit from it in the future.

Stellanits NV says it will increase its share of ownership of a joint venture in China to boost the Jeep brand, but partner GAC Motors says it didn't agree to the equity arrangement.

In a statement, Stellantis said, "GAC Group and Stellantis have agreed to collaboratively complete the relevant formalities of the deal," which is subject to approval by the Chinese government, which means the company must disclose the step to investors.

GAC then posted a statement on its website, saying it first heard about the announcement of the equity arrangement by the news release on Stellantis' website.

"GAC Group deeply regrets that this release is not agreed by us," according to the statement. "GAC Group will strictly abide by the national policies and regulations and adhere to the principle of mutual trust and win-win to promote joint venture and external cooperation business."

A Stellantis spokesman declined to comment on GAC's comment

China previously required that foreign automakers partner in up to 50-50 joint ventures with native companies to sell there. It already had lifted the restrictions for fully electric brands like Tesla Inc. That extended to more makes this year. Other companies like Volkswagen AG have increased their share in their JVs.

The venture with GAC was inherited by Stellantis from the Fiat Chrysler Automobiles NV side of the merger with French competitor Groupe PSA last year. The partnership with GAC formed in 2010.

Stellantis says it's creating a simplified operating organization called "Stellantis Jeep" to develop the brand in China under a "One Jeep" strategy that emphasizes cost reductions and savings.

The focus will be on the Changsha manufacturing plant, which is preparing to launch the Compass crossover, a new product for China. The joint venture also has a plant in Guangzhou.

Otherwise, Stellantis has said it intends to introduce Germany-based Opel as an all-electric brand to China with an undisclosed timeline. The automaker will share more on its plans for China and its greater global strategy in March.

Twitter: @BreanaCNoble