As the joint venture red line with a foreign equity ratio of no more than 50 per cent for decades has "disappeared" this year, Stellantis, which was formed by the merger of PSA and FCA a year ago, is also eager to give it a try.
On January 27th, Stellantis announced plans to increase its stake in Guangzhou Auto Fick, a joint venture with GAC GROUP, from 50 per cent to 75 per cent. GAC GROUP and Stellantis have agreed to the formalities of the deal, but are still subject to regulatory approval.
"(increased to 75%) will be a key link for the group to lay a new foundation for its business in China." Stellantis said more details about the Chinese market plan were expected to be announced in the global strategic plan on March 1.
Interestingly, this may just be Stellantis's wishful thinking. In the evening, GAC GROUP issued a statement saying that he learned of his release on the equity adjustment of Guangzhou Auto Fick from the official website of Stellantis. GAC GROUP deeply regrets that this release has not been approved by us. With regard to foreign joint ventures and cooperation, GAC GROUP will strictly abide by the national policies and regulations and promote it on the principle of mutual trust and win-win results. " GAC said.
Data show that Guangzhou Auto Fick was founded in March 2010, jointly invested by GAC GROUP and Stellantis Group (former FCA) with a share ratio of 50:50, with a total investment of about 17 billion yuan. If the above plan is approved, it means that the shareholding ratio of GAC Fick shareholders will become 25%. Stellantis Group will also become another foreign car company after BMW, Volkswagen, Kia, etc., to acquire Chinese shares in Sino-foreign joint ventures and become shareholders.
In fact, GAC's "exit" has long been a sign. In September last year, there was news in the industry that GAC GROUP had agreed with Stellantis Group to transfer his 20 per cent stake in Guangzhou Auto Fick and was in the process. At that time, although both sides said that "there is no such news at the moment", at the same time as the above news, there was also GAC Fick's plan to dispose of its assets, that is, GAC Fick's Guangzhou plant would stop production. In the future, all GAC Fick's models will be produced by the Changsha plant. And this rumor, the reporter got GAC GROUP high-level "Guangzhou Fick Guangzhou factory production line transfer is really the case" response.
"for GAC GROUP, the current GAC Fick is a complete burden." Ren Wanfu, an auto analyst, believes that some adjustments to the GAC Fick joint venture stock ratio may bring some hope to the enterprise. "for the Stellantis Group, having control can also open up its hands and feet, while GAC GROUP can also reduce his burden by selling his shares in Guangzhou Auto Fick."
Guangzhou Auto Fick Jeep sold only 20123 vehicles in 2021, down more than 50 per cent from 40513 in 2020, according to GAC GROUP. If monthly sales are estimated, the average monthly sales of Guangzhou Auto Fick's Jeep last year was only about 1677.
As for the current situation of the Jeep brand in China, Stellantis actually has a plan for a long time. After the news of the suspension of production at the Guangzhou plant of GAC Fick in September last year, Stellantis issued a statement saying that "in view of the great development potential of the Jeep brand in the Chinese market, Stellantis Group will fully integrate its import business of the Jeep brand in China and the local joint venture business of the Jeep brand". On January 27th, when the official announced that it planned to adjust the Fick share ratio of Guangzhou Automobile, Stellantis also said that it would focus on the Changsha plant around the "One Jeep" strategy and "is currently preparing to launch a compass model."
It is worth noting that, with Guangzhou Auto Fick, it is another joint venture of Stellantis Group in China-Shenlong Automobile. Data show that in 2021, the cumulative wholesale volume of new cars of Shenlong Automobile exceeded 100000, an increase of 100.07% over the same period last year, but there are still some problems, such as low market share and over-reliance on a single model. Last year, the first factory of Shenlong was collected and stored by the government, and the second factory was sold, and the original equipment and production were transferred to the third factory.
"at present, Stellantis Group still doesn't know enough about Chinese consumers." Some industry insiders believe that although Stellantis Group has regarded the Chinese market as an important strategic market since its inception, the brand-new "strategic plan" for its development in the Chinese market has not been met with the public for a long time. "if Stellantis Group cannot focus on transformation and become electrified and intelligent, the market share of JEEP brand, Dongfeng Peugeot and Dongfeng Citroen will become lower and lower."
