BRIEF: GAC-Stellantis joint venture officially declared bankrupt

Guangzhou Automobile Group Co. Ltd. (2238.HK; 601238.SH) and Stellantis (STLA.US), the world’s fourth-largest automaker, on Tuesday said court overseeing the liquidation of their joint venture, GAC Fiat Chrysler Automobiles Co. Ltd. (GAC FCA), officially declared the venture bankrupt. The court-appointed bankruptcy administrator confirmed that the company was unable to repay its debts and lacked the assets or conditions for restructuring or settlement.

A recent update released via the administrator’s official WeChat account said GAC FCA, once known for localizing Jeep models and achieving strong sales in China, suffered a long-term production halt after failing to compete in the market.

In October 2022, GAC FCA entered bankruptcy proceedings after its operating losses and asset shortfalls left it insolvent. More than 3,000 assets, including production molds and prototype vehicles, have been auctioned off since then. Five public auctions of core assets, including land, buildings, and equipment, failed to attract any bidders.

GAC Group said the bankruptcy was handled in accordance with legal procedures and that it respects and supports the court and administrator’s actions. While local Jeep production has ceased, Jeep models like the Wrangler and Grand Cherokee continue to be sold in China through imports.

GAC’s shares opened lower on Wednesday in Hong Kong, and closed up 1.02% at HK$2.96 by the midday break.

By Lee Shih Ta

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