The only Jeep factory in China was just shut down because local politicians were increasingly meddling in the company’s affairs, according to parent company Stellantis NV’s Chief Executive Officer Carlos Tavares.
Tavares said additionally, rising political tensions are leading to fears of sanctions as China increasingly is coming into conflict with the rest of the world, so the carmaker is implementing an “asset light” strategy in the country.
Tavares said, “We have been seeing over the last few years more and more political interference in the world of business in China. We don’t want to be a victim of cross-sanctions as has been the case for other companies in other regions of the world recently.”
Stellantis had already announced last week that it was leaving a 12-year partnership on manufacturing with state-owned Guangzhou Automobile Group. The auto-giant’s sudden exit has raised questions among investors as to what the future may hold for other foreign manufacturers operating in China, or dependent on Chinese parts and suplies to manufacture their own products abroad.
Many are now looking at the disrupted supply chains in Europe, as well as the effects of the sudden imposition of sanctions on Russia, and beginning to fear what might happen were China to suddenly begin to assert its authority over Taiwan more aggressively.
Already automakers such as Stellantis, Volkswagen AG and General Motors were finding it more challenging in the nation as Chinese manufacturers such as BYD Co. Li Auto Inc. and Nio Inc. close the gap technologically, and begin offering a slew of fully electric models for sale.
Tavares stated Stellantis had singed a deal to raise its stake in the partnership with local company GAC, however GAC “did not do what it was supposed to do, so we considered that it was better to unwind.”
The partnership had produced Jeep Cherokee, Renegade, Compass and Grand Commander models for local sale, however now Stellantis says it will instead ship electrified versions of other Jeep models direct to Chinese dealers.
