Automobile

Stellantis mulls halting all carmaking in China after Jeep exit

Stellantis may stop manufacturing cars in China as geopolitical tensions escalate and western manufacturers cede market share to domestic players.

The producer of Peugeot and Citroën cars may implement an “asset-light” strategy for those brands in the world’s largest auto market, CEO Carlos Tavares said Monday. Earlier this year, he used the same phrase to describe Stellantis’ decision to pull out from the company’s only Jeep plant in the country.

“If we push ahead with this strategy — which is our strategy right now — then we don’t need plants in China,” Tavares told reporters at the Paris auto show, adding that the company could instead import vehicles made in Europe or the US. “I am not sure they are indispensable.”

Stellantis is mulling the potential exit as more established foreign auto brands have struggled to maintain their position in China’s market, raising questions about their long-term future in the country.

Business for the likes of Stellantis, Volkswagen Group and General Motors is becoming more challenging as local manufacturers including BYD Co.  and Geely Automobile Holdings Ltd. roll out a slew of electric models.

Stellantis’s Opel brand said last month it’s pausing a planned expansion in China. Jeep’s 12-year-long joint venture with Guangzhou Automobile Group struggled to gain traction in the country before its parent announced the pullback in July. State-owned GAC Group blasted its partner’s decision to rely only on imports after the two sides were unable to agree on Stellantis raising its stake in their joint venture.

Manufacturers are increasingly taking into account what’s happened with the war in Ukraine and considering whether the ever-lengthening list of sanctions targeting Russia would similarly apply to China if the country were to assert itself in Taiwan.

Other automakers are doubling down on China. Germany’s BMW is shifting production of electric Mini hatchbacks from the UK to the eastern province of Jiangsu, and also will assemble a small crossover in the country through its partnership with Great Wall Motor Co.

Worries are mounting that Chinese carmakers are making inroads in Europe’s already competitive markets. Tavares, who blamed political meddling for Stellantis’s Jeep decision, on Monday said European authorities should introduce restrictions similar to ones foreign carmakers face in China.

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