Stellantis Group, the world’s fourth largest auto company, recently said that it was fed up with China’s increasing political interference and has decided to end its cooperation with GAC Group and will close China’s only Jeep factory.

The Associated Press reported on July 31, that Jeep’s world-class factory in Changsha was deserted and overgrown with weeds. There were very few people or vehicles entering the factory to come to work.

An GAC employee of the FCA’s Changsha factory said that basically production had stopped during the Chinese New Year. He said, “I heard the factory will be sold, and other companies have come to inspect it recently.”

In July 2009, GAC Group and Stellantis signed a cooperation framework agreement. In June 2012, GAC FCA’s Changsha factory, known to be world class, was completed.

However, after 2016, the factory’s sales and output decreased every year. In the first half of 2022, GAC FCA produced only 822 vehicles, a year-on-year decrease of 89%. During the same period, the total asset impairment loss of GAC Group was approximately $102 million. Stellantis also said it would recognize a non-cash impairment charge of about $302 million in the first half of 2022.

On July 18, after negotiations, GAC and Stellantis announced that they had decided to terminate their joint venture because it had continued to lose money.

On July 29, Carlos Tavares, Stellantis’s CEO, said that GAC did not want to comply with the binding memorandum of understanding signed by the two companies.

Tavares added that the cooperation between Stellantis and GAC was affected by frequent political intervention in the Chinese business community and the involvement of local officials. Moreover, Stellantis was concerned about political tensions between China and other countries, so it decided to end the cooperation.

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