Stellantis announced the conclusion of an agreement with the Chinese group Dongfeng regarding sale of three factories located in China, owned by the Dongfeng Peugeot Citroën Automobile (DPCA) joint venture. The details of this strategic transaction were revealed during the official announcement of Stellantis.
DPCA, a joint venture between Stellantis and Dongfeng Motors, was responsible for three plants located respectively in Wuhan, Chengdu and Xiangyang in China. However, under this agreement, Dongfeng Motors will regain control over these industrial facilities. The continuation of production of Peugeot and Citroën models, in addition to managing the sales of the Peugeot and Citroën brands in the Chinese market, will now be Dongfeng Motors’ business.
What is the strategy for Stellantis in China?
According to the financial agency, the amount of the deal is 1.71 billion yuan (about 220 million euros). Stellantis confirmed Bloomberg’s information and emphasized that this development was part of its strategy to reduce assets in China. From now on, production of Peugeot and Citroën cars intended for the Chinese market and for export will be carried out at factories owned by Dongfeng Motors.
The decision comes a year after the bankruptcy of Stellantis’ joint venture with China’s Guangzhou Automobile Group Co (GAC), which was responsible for Jeep production in China. Stellantis, an Italo-Franco-American conglomerate that unites 14 brands, has been experiencing difficulties in penetrating the Chinese market for a long time.
Make it easier to arm yourself better?
Recently, there have been rumors of a possible alliance between Stellantis and Leapmotor, a Chinese startup specializing in 100% electric cars. This information appeared during the Munich Motor Show, where Leapmotor expressed its desire to cooperate with the European group. Although Leapmotor remains relatively unknown in Europe with only one model sold, the T03, it still sells about 10,000 cars per month in China.
Like other European brands, Stellantis aims to avoid the pitfalls of the highly competitive Chinese market by working with local manufacturers. This strategy, combined with the sale of the Dongfeng Motors plants, may allow the Italo-Franco-American group to resume operations in China.
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Source: Auto Plus
Robert is an experienced journalist who has been covering the automobile industry for over a decade. He has a deep understanding of the latest technologies and trends in the industry and is known for his thorough and in-depth reporting.