Stellantis, the new group created from the merger of Fiat Chrysler Automobiles and PSA Group, is in talks with China’s Chery Automobile and Guangzhou Automobile Group, known as GAC, to create a joint venture, Chinese media reported.
Both FCA and PSA have struggled recently in China. PSA dissolved one of its two joint ventures there, with Changan Automobile, at the end of 2019. The other venture is with Dongfeng, which holds a stake in Stellantis, and was instrumental in recapitalizing PSA in the early 2010s.
FCA now sells only the Jeep brand in China. The automaker builds gasoline and plug-in hybrid variants of the Jeep Grand Commander as well as the gasoline models of the Renegade, Compass and Cherokee at its current joint venture with GAC.
Stellantis would hold 75 percent of the shares in the new venture, which will make a variety of vehicles from passenger cars to energy-efficient vehicles, according to the financial news site Yicai, citing sources that it did not identify.
Stellantis may also close an existing joint venture in China to offload some of its capacity, the publication said.
in a statement sent to Bloomberg News on Sunday, Stellantis denied the report that it was in talks for a new joint venture,
“Stellantis remains committed to its current joint venture partners Dongfeng Motor Corporation and Guangzhou Automotive Group,” it said.
PSA Chief Financial Officer Philippe de Rovira told analysts in November that operations in China would probably be streamlined in Stellantis.
“It's not reasonable to think that we will continue with so many brands, so many platforms and so many car lines in Stellantis, given the volumes that the combined entities are doing,” he said.
FCA now sells only the Jeep brand in China. The automaker builds gasoline and plug-in hybrid variants of the Jeep Grand Commander as well as the gasoline models of the Renegade, Compass and Cherokee at its joint venture with GAC Motor.
Stellantis CEO Carlos Tavares, who was CEO of PSA, has said that the expanded group will have a better chance of succeeding in the Chinese market, the world’s largest.
Bloomberg contributed to this report