Shaky start for Stellantis bid to grab larger China stake

MILAN (AP) — Moves by carmaker Stellantis to consolidate its position in fast-growing China seemed to be off to a rocky start after one of its joint venture partners said it hadn’t been consulted before an announcement of plans to take a controlling stake.

Stellantis, formed a year ago from the merger of PSA Peugeot with Fiat Chrysler, has less than a 1% share in the 21-million vehicle Chinese market where it inherited two joint ventures. It plans to lay out its strategy March 1, but has offered some hints in announcements this week.

They include plans to increase the stake in Chinese partner GAC Stellantis from 50% to 75% under new rules allowing more foreign investment. On top of that, it announced Friday that the other joint venture partnership with Dongfeng had doubled sales last year.

The company said on Thursday the deal to expand its GAC Stellantis stake had been agreed with the GAC group, but the Chinese partner replied that it had not been informed and that the release had not been agreed. The deal is subject to approval by the Chinese government.

“This is not a good sign,’’ said Ferdinand Dudenhoeffer, of the Center for Automotive Research (CAR) in Germany. “It could mean the deal will not go through, or that the Chinese want to have more money.”

China has gradually been lifting its requirement for foreign automakers to work through joint ventures with state-owned partners to produce cars in China. Foreigners were allowed 100% ownership of electric vehicle manufacturers in 2018. That expanded to commercial vehicles in 2020 and passenger vehicles this month.

Stellantis’ move to gain greater control of its joint ventures is especially important given that that GAC runs other JVs, Dudenhoeffer said. GAC partnerships with Honda, Toyota and Mitsubishi have...