Earlier this year Stellantis CEO Carlos Tavares sounded the alarm about Chinese auto manufacturers flooding the European market with low cost electric vehicles and last year the company blindsided partner Dongfeng Motor Group with its decision to end making Jeeps in China to switch course to an ‘asset-light’ strategy that included more imports of vehicles. Well, Stellantis appears to have had a change of heart.
In the past couple of weeks Stellantis announced moves to manufacture and distribute Chinese manufactured EVs in Europe and other markets worldwide and that the Stellantis-Dongfeng joint venture will continue to make Peugeot and Citroën cars for Chinese customers.
Stellantis will sell automotive assets to its Chinese partner Dongfeng Motor Group and as part of the deal, Dongfeng Motor will acquire certain land use rights, buildings and structures in Wuhan and Xiangyang from Dongfeng Peugeot Citroën Automobile. The sale will net Stellantis 1.71 billion yuan ($234 million US). The joint venture will continue to make Peugeot and Citroën cars for Chinese customers via a 10-year leasing agreement.
Stellantis said it will also support the joint venture in exporting Peugeot 4008 and Peugeot 5008 models to other Asian countries, and the Citroën C5X model to Europe.
In a move to offer to offer lower cost EVs to compete with Chinese competitors in the European and other global markets and to bolster sagging sales in the Chinese market Stellantis has agreed to invest 1.5 billion Euros in Leapmotor (a 20% stake in the formation of Leapmotor International) with a Stellantis-led joint venture that has exclusive rights for the export and sale, as well as manufacturing, of Leapmotor EV products outside Greater China.
“In order to ensure the perfect execution of our recently announced strategic in initiative with Leapmotor, we have decided to adapt our organization in China, relying on two very skilled top executives,” Stellantis CEO Carlos Tavares said.
Grégoire Olivier will take the responsibility of a newly created ‘liaison office’ to Leapmotor, reporting to Stellantis CEO Carlos Tavares. He will also serve as a board member of Leapmotor.
Grégoire will ensure the dynamic execution of the new strategic partnership, including the creation of the sales joint venture and the coordination with Leapmotor on the use of Stellantis distribution and sales assets, the company said in a media release.
Doug Ostermann will be appointed Chief Operating Officer of China, reporting to Carlos Tavares, replacing Grégoire. He will also serve as a board member of Leapmotor. The press release went on to say; “Doug has acquired a strong knowledge of Stellantis’ operations, and of the challenges of growing the business in the competitive Chinese context. He has proved his agility, negotiating skills and resilience, and is ready to take on this operational responsibility. Doug most recently served as Chief Financial Officer and Head of Strategy in China.”
Stellantis claims that Leapmotor International will be an industry-first global electric vehicle relationship between a leading automaker and a Chinese EV manufacturer.
The two companies consider Leapmotor’s EV product offering to be complementary to Stellantis’ current technology and portfolio of 16 brands (Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Mopar, Opel, Peugeot, Ram, and Vauxhall) and will bring more affordable mobility solutions to global
customers.
The partnership aims to further boost Leapmotor’s sales in China, the biggest market in the world, while leveraging Stellantis’ established global commercial presence to significantly accelerate Leapmotor brand sales in other regions, starting with Europe.
Stellantis intends to leverage Leapmotor’s highly innovative, cost-efficient EV ecosystem in China to help meet core Dare Forward 2030 electrification targets, with the possibility to further explore mutually beneficial synergies. The joint venture expects to begin shipments in the second half of 2024.
Whether some of the Leapmotor EVs that are exported from China and sold through Stellantis in Europe and other worldwide markets will be badged and branded as Citroën remains to be seen.