Stellantis JV's bankruptcy just the first of many on China's domestic market?
The bankruptcy of Stellantis' Jeep joint venture could spell trouble for other global brands trying to make it on China's home turf.
It was the first failure by a foreign brand in the electric vehicle (EV) era, but market analysts expect many more to follow.
"I do not expect Stellantis to be an isolated case. Probably almost all of the western carmakers will have to review the industrial logic of their presence in China," said Marco Santino, a partner at management consultants Oliver Wyman to Reuters.
Months after announcing plans to terminate its Jeep joint venture in China with GAC Group, the Stellantis JV has officially filed for bankruptcy. Data compiled for Reuters by consultancy LMC Automotive however reveal a problem shared by other global carmakers: production in China is not fully utilised. So are Volkswagen, General Motors, Ford, Mitsubishi and Hyunda are shown with plummeting plant usage (anything from over 30 to more than 50 percentage points in the last five years). Others, such as BMW or Mercedes had to cope with smaller declines; but declines nontheless.
Compounding the problem are dropping sales numbers. Chinese rivals, who seem to have taken to electrification much faster, are also quick to rake up market share.
"The last five years, (China's) market has decidedly changed from foreign companies having a right to win because of their foreign-ness to where there is a far more level playing field," Bill Russo, head of consultancy Automobility Ltd in Shanghai, told Reuters.