The joint venture “has not been able to establish a mutually trustworthy operating mechanism adapted to the highly competitive environment in China in order to turn the adverse situation of continuous losses in recent years,” GAC Group said.
While Tavares acknowledged that the business was racking up losses, he said the company’s reasons for leaving ran deeper. The decision was rooted in “broken trust” with its local partner, as well as Chinese policy favoring the emergence of local brands, he said.
While Stellantis had signed a deal to raise its stake in the GAC joint venture to 75 percent, GAC Group “did not do what it was supposed to do,” Tavares said. “So we considered that it was better to unwind.”
A spokesman for Stellantis said an agreement to proceed to filing was signed by the company and GAC Group in February; he declined to comment further on the statement.
The Chinese group said it didn’t file paperwork because there was “no consensus on relevant agreements,” and that Stellantis was the party not fulfilling its commitments.
The venture had produced the Jeep Cherokee, Renegade, Compass and Grand Commander models primarily for the China market. Stellantis will instead ship an electrified lineup of different Jeep vehicles to its dealers in the country.