Due to low sales, Stellantis cancels joint-venture with GAC

Jeep parent company Stellantis has announced its joint-venture with Chinese automaker GAC has been terminated. According to the company, the partnership between the two which started in 2010 as FCA-GAC has resulted in Stellantis losing money instead of making a profit.

Under the partnership, GAC was able to locally produce several Jeep models for the Chinese market including the Renegade, Compass, the Cherokee, and the Grand Commander which Jeep Philippines quietly launched last March 2021. But due to low sales, Stellantis decided to just cancel the joint-venture.

With Stellantis essentially filing for divorce, local production of Jeep models in China will cease to exist. However, this doesn't mean Jeep will exit the Chinese market. Instead, Jeep will directly import vehicles for the People's Republic.

Jeep's partnership with GAC has been terminated image

According to a Stellantis spokesperson that spoke with Reuters, the company came to a conclusion that it would be better to just shutter the joint-venture since it wasn't making money and it has been enduring years of losses.

“We came to the conclusion that it was better to close the joint venture. The Jeep brand will continue to strengthen its product offering in China with an enhanced electrified line-up of imported vehicles,” said the spokesperson.

As for the Philippine market, Jeep might have to figure out where will they source the Renegade and Compass in the future. That's because both vehicles currently being offered here are sourced from China via the now-terminated Stellantis-GAC partnership. This allowed Jeep to price the Compass and Renegade below PHP 2 million by taking advantage of the ASEAN-China Free Trade Area (ACFTA).

Jeep's partnership with GAC has been terminated image

With Stellantis and GAC parting ways, perhaps Jeep can now toy with the idea of building cars in Southeast Asia. Earlier this year, we reported that Stellantis appears to be considering building Jeep vehicles at its new Gurun plant in Malaysia. This doesn't come as a surprise since Peugeot is already making the 2008, the 3008, and the 5008 in Malaysia for ASEAN markets – including the Philippines.

If ever Stellantis wants to expand production and sales in ASEAN, they could take advantage of having a factory in Malaysia in order to build both left-hand drive and right-hand drive vehicles for Southeast Asia. But for now, we'll be keeping our eyes peeled for any possible info regarding the matter.