Jeep-China joint venture quietly died

Jeep’s joint venture with Guandgzhou (GAC) has declared bankruptcy.

Jeep was the first American company to make and sell vehicles in China, with Beijing Jeep; this was before China required that foreign companies form joint ventures with Chinese firms. When Daimler-Benz took over Chrysler, though, they gave the company and factory to Mercedes.

Jeep Renegade (made in China)

For a time, China looked like the best hope for expansion for Western automakers, though until recently the country’s rules demanded joint ventures rather than direct ownership.

Numerous roadblocks remain in place for foreign competitors, including a tendency for China to smile on local companies stealing intellectual property—which means that those who bring their top game to China may have their industrial secrets stolen and their products cloned, while those who are more cautious won’t be competitive. Restrictive zero-COVID policies cause shortages, and at times government media foment rebellion against foreign companies (though the latter is more commonly aimed at Japan). Finally, the Chinese government has sometimes held foreign companies’ local interests hostage to other policies, such as having maps indicate that Taiwan is part of China rather than a separate country.

Stellantis’ move to put the joint venture into bankruptcy has already been accounted for in its financial results. The firm, will continue on, but only to provide services. Jeeps will still be imported into China from other countries, with India likely to be tapped for models made there, Italy for the Compass and Renegade, and the United States for anything else. Sales are likely to decline, though, as this will increase costs.

Stellantis originally intended to increase its stake in the joint venture to a controlling interest, but suddenly reversed course.

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