Three years after announcing its withdrawal from the Chinese market, GAC Fiat Chrysler Automobiles (GAC-FCA) has officially succumbed to its financial woes. On July 8, the joint venture announced its inability to reorganise, leading its administrator to file for bankruptcy with the Changsha Intermediate People’s Court in Hunan Province, a move supported by creditors.

GAC-FCA’s predecessor, GAC Fiat, was established on March 9, 2010, as a 50:50 joint investment between GAC Group and Stellantis Group (formerly Fiat Chrysler Automobiles), with a total investment of approximately 17 billion yuan.

Initially, GAC-FCA primarily produced Fiat brand models such as the Viaggio, Freemont, and Bravo. In June 2012, the Changsha plant was completed and began production, with the first localised model, the Fiat Viaggio, launching and achieving sales of 9,104 units in its inaugural year.

2015 was a turning point for the company. It officially rebranded as GAC Fiat Chrysler Automobiles (GAC-FCA) and shifted its focus to the Jeep brand. In October of the same year, the first localised SUV, the Jeep Cherokee, was launched and quickly gained market traction. In 2016, GAC-FCA’s sales reached 146,400 units, a 270.84% year-on-year increase. This further climbed to 205,200 units in 2017, up 57% year-on-year, making it the fastest-growing joint venture automaker in China at the time.

However, after 2018, GAC-FCA’s sales began a precipitous decline. Sales dropped to 125,100 units that year, a 38.99% year-on-year decrease. The downward trend continued in 2019. By 2020, sales further shrank to 73,900 units, and in 2021, they plummeted to a mere 20,100 units.

Facing continuous sales declines, GAC-FCA attempted to rescue itself. Both shareholders, Stellantis Group and GAC Group, injected 1 billion yuan and 3 billion yuan, respectively, in August 2020 and July 2021, totalling 4 billion yuan for a revitalisation plan. Unfortunately, these capital injections failed to reverse its financial distress.

The partnership ultimately dissolved in 2022 due to fundamental disagreements. In January of that year, Stellantis Group unilaterally announced plans to increase its stake in the joint venture from 50% to 75%, a plan immediately and publicly denied by GAC Group, which stated it was unauthorised.

This equity dispute ultimately led to the termination of their cooperation. In July 2022, GAC Group and Stellantis Group announced the negotiated termination of the GAC-FCA joint venture, signalling the end of an enterprise that had been in decline since its sales peak in 2017 due to strategic missteps (with sales of only 21,000 units in 2021). In October of the same year, Stellantis’s official website announced GAC-FCA’s bankruptcy filing due to losses. Since then, the Jeep brand in China has retained only its imported vehicle business, with all localised models ceasing production.

Source: TMTpost