London, UK – European automotive group Stellantis has signed a major strategic agreement worth €1 billion (approximately 8 billion yuan) with the Chinese state-owned company Dongfeng.
The agreement aims to produce Peugeot and Jeep vehicles in China.
The group, which owns prominent brands such as Fiat, Peugeot, and Jeep,
explained that the new models will be manufactured under a joint venture with Dongfeng at its factories in Wuhan.
This is intended to meet the growing demand of the Chinese market. Additionally, the vehicles will be exported to global markets.
Velosa’s plan to revive sales and offset losses
This agreement is a key part of the ambitious strategy spearheaded by Stellantis’ new CEO, Antonio Velosa.
The strategy aims to revitalize the group and return it to profitability, compensating for years of weak sales
and a significant decline in major traditional markets such as Europe and the United States.
Under the terms of the deal, Stellantis will contribute €130 million towards the total targeted investment.
According to a report in the Financial Times, this partnership clearly reflects the growing pressure on Western automakers.
They are now compelled to collaborate closely with their Chinese rivals to capitalize on Beijing’s rapid advancements in software development.
Furthermore, these advancements encompass battery technologies and autonomous driving systems,
crucial elements for the successful transition to the electric vehicle era.
Targeted production map for Wuhan factories
Stellantis announced that Dongfeng’s facilities in Wuhan will be used by 2027 to produce two all-new new energy models under the Peugeot brand.
In addition, two hybrid Jeep models for international markets will also be produced there.
This announcement comes just a week after Stellantis expanded its partnership with Chinese manufacturer Lippmotor.
That partnership included the handover of one of the group’s factories in Spain to produce low-cost electric vehicles.
Sources indicate that Stellantis and Dongfeng are currently in talks to further expand their collaboration.
This expansion would include production lines within Europe.
