The joint venture “has not been able to establish a mutually trustworthy operating mechanism conducive to the highly competitive environment in China to turn the tide of sustained losses in recent years,” GAC Group said.
GAC said it expects the companies to liquidate the venture in a “practical and responsible manner.”
Stelantis officials declined to comment on Friday about GAC’s statement.
While Tavares acknowledged that the business was running at a loss, he said the reasons for leaving the company were deeper. The decision was rooted in “broken trust” with its local partner, as well as the Chinese policy favoring the emergence of local brands, he said.
Tavares said Stelantis had signed an agreement to increase its stake in the GAC joint venture to 75 percent, but the GAC group “did not do what it should have done.” “So we thought it was better to rest.”
A Stelantis spokesperson said an agreement was signed in February by the company and GAC Group to proceed with the filing; He declined to comment further on the statement.
The Chinese conglomerate said it did not file the paperwork because “there was no consensus on the relevant agreements,” and that Stellantis was the party that was not meeting its commitments.
The enterprise produced Jeep Cherokee, Renegade, Compass and Grand Commander models primarily for the China market. Instead Stelantis will ship an electrified lineup of various Jeep vehicles to dealers in the country.
With less than 1 percent of the Chinese market, Stelantis is looking to improve its strategy. In its 2030 business plan released in March, Stelantis said it would adopt an “asset-light” business model in China, which still aims to increase revenue, but through imports rather than domestic production.