Stellantis automaker boss warns of growing Chinese interference in business
The head of automaker Stellantis has warned of growing Chinese government interference in Western companies operating in the country, days after the company abandoned its joint venture to manufacture Jeep vehicles there.
Carlos Tavares said ‘interference from the political agenda is increasing day by day’, and said rival automakers with factories in the country could even lose them if the world ‘fragments’ and China was embroiled in a sanctions standoff with the West. nations.
“There is growing political interference in the way we do business as a Western company in China,” Tavares said.
Stellantis, which was formed by the merger of Jeep owner Fiat Chrysler and Peugeot owner PSA last year, has long struggled in China, while rivals such as Volkswagen and General Motors have made significant profits in the country. .
Last week, Stellantis dissolved a joint venture with Guangzhou Automobile Group, which ran a factory building Jeeps in the country, a reversal of its previous plans to increase its stake in the company. The company recorded an accounting charge of 297 million euros in its half-year profits following the decision.
The move leaves Jeep, Stellantis’ most successful global brand, dependent on expensive imports into the world’s largest auto market.
Tavares said the decision was “visible” evidence of political interference.
Stellantis “has signed a binding Memorandum of Understanding [memorandum of understanding] with our GAC partner in China,” he said. “For reasons difficult to understand, our partner who had signed the MOU did not want to execute the MOU and preferred to be in breach.”
As a result, “trust was broken and we had to unwind the trades,” he said.
GAC did not respond to a request for comment.
The question of how to navigate business in China, which for many automakers is one of their main sources of profit, has been on the agenda this year.
Following Russia’s invasion of Ukraine, several automakers privately voiced fears that withdrawing from the market would set a precedent that would force them to abandon Chinese operations if the country ever took military action against Taiwan. .
Tavares said Stellantis’ “asset lite” approach in China of importing vehicles rather than building locally was the best way to operate for the future, and the company had no plans to seek to open. factories.
He cited the examples of Russia and Iran, where Stellantis was forced to shut down some operations due to sanctions. “We learn from experiences in a fragmented world,” he said.
“When geopolitical tensions increase and end in cross sanctions, if you have a business in the two countries that are opposing each other in the cross sanctions, you have to choose,” Tavares added. “One block or the other block.”
He said automakers with major Chinese factories – including VW, GM and Tesla – would be “very vulnerable to this situation if it materialized”.