JAKARTA - Stellantis is not ready to give up in China. The automotive giant, owner of Peugeot and Jeep, partnered with Dongfeng Motor to invest 8 billion yuan or around USD1.2 billion to produce Peugeot and Jeep electric vehicles or EVs locally. The investment is equivalent to around Rp21.36 trillion, assuming a rate of Rp17,800 per US dollar.
Launching a report by Yicai Global, Tuesday, June 2, this move is aimed at raising Peugeot and Jeep sales in China. The market is now getting tougher, especially after Chinese local brands have made rapid strides in the electric vehicle segment.
Production will be carried out through Dongfeng Peugeot Citroën Automobile, a joint venture of Stellantis and Dongfeng Motor. A joint venture is a joint venture owned by two or more companies.
Starting next year, their factory in Wuhan is targeted to produce two new Peugeot electric models and two new Jeep off-road electric models. The electric cars will be sold in China and overseas markets.
Stellantis will deposit around 130 million euros or USD151.4 million for the project. The project also received support from industrial policies in Hubei Province and Wuhan City.
Stellantis CEO Antonio Filosa said the more than 30-year partnership with Dongfeng was capital for bringing new EV technology-based vehicles.
"Stellantis and Dongfeng Motor are ready to further leverage each other's strengths and introduce new vehicles with cutting-edge EV technology," Filosa said.
Dongfeng Motor Chairman Yang Qing said the transformation of Dongfeng Peugeot Citroën Automobile was the company's strategic priority.
According to Yang, this cooperation combines the strength of Hubei's industry, Stellantis' global network, and Dongfeng's smart electric vehicle technology.
This move comes at a time when Stellantis' position in China is heavy. Yicai Global noted that Dongfeng Peugeot Citroën, the only Stellantis joint venture still left in China, only sold 51,507 vehicles last year.
That's down 25 percent from a year earlier. More sharply, sales have plunged more than 90 percent from their peak a decade ago.
Stellantis also previously had another joint venture, GAC Fiat Chrysler. However, the company entered bankruptcy and liquidation in 2022. Bankruptcy means that the company is unable to meet its debt obligations, while liquidation is the process of disposing of assets to settle these obligations.
Local production of Jeeps through the joint venture was also halted. After that, Jeep only relied on imported models in China.
The new project with Dongfeng is part of Stellantis' efforts to improve the position of Peugeot and Jeep in China, after sales of the two brands have fallen sharply in recent years.
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