International manufacturers have long been interested in China, which has become the world’s largest automobile market. The fact remains that for some of them, this gold rush ended in disillusionment. Stellantis, for example, had allied itself with the local manufacturer Dongfeng, since it was then an obligatory step to invest in the Chinese market, but subsequently withdrew almost entirely from the Middle Kingdom. Stellantis’ remaining assets in China will be sold to its partner.
Today, it is above all Chinese groups that are trying to get their hands on Europe, with their own manufacturers, by buying European brands, or by taking significant stakes in large historical groups.
Leapmotor, a very young manufacturer of electric cars
Despite a first attempt which ended in failure, Stellantis has not completely abandoned its Chinese ambitions. Thus, the Franco-Italian-American group announces plans to invest nearly 1.5 billion euros for the acquisition of approximately 20% of Leapmotor, a young Chinese manufacturer of electric cars founded in 2015. The transaction, which still to be approved by regulatory authorities, should allow Stellantis to become a significant shareholder of Leapmotor, thus granting itself two seats on the company’s board of directors.
However, this agreement differs from those previously concluded with Dongfeng or even GAC. In fact, it provides “the creation of a joint venture ‘Leapmotor International’, managed by Stellantis on a 51/49 basis, which will hold the exclusive rights to manufacture, export and sell Leapmotor products outside China”. In addition to developing Leapmotor’s sales in China, this partnership aims to help the manufacturer export internationally, starting with Europe.
“In previous partnerships, Stellantis was not the promoter of the development of Chinese brands abroad. If we develop Leapmotor abroad, this will allow it to be more competitive in the Chinese market”explains Carlos Tavares, CEO of Stellantis (source: Automotive News Europe).
Future synergies could also be found with Leapmotor, whose R&D is largely internalized, particularly with regard to components specific to electric cars as well as in terms of software.]
Faced with Chinese electric cars, Europe wants to tighten the screw
The first deliveries from the Leapmotor International joint venture are scheduled for the second half of 2024. The two partners will, however, have to face a European policy that is less and less favorable to the import of Chinese models, accused of unfair competition with European manufacturers. The European Commission has opened an investigation which could lead to an increase in customs duties.
In January, Carlos Tavares declared that Europe must protect its manufacturers against Chinese competition, which offers electric cars at much more attractive prices, but he now deplores the opening of this investigation. “As we face global issues, we need to adopt a global mentality. We do not favor a fragmented world. We like competition. Launching an investigation is not the best way to approach these issues“, he explains (source: Automotive News Europe).