Foreign automakers saw their share of China’s auto market, now the world’s largest, drop by 5.5 percentage points last year, to 45.6%, according to the China Passenger Car Association.
The joint-venture model, which China had insisted on as a condition of investment by foreign automakers, is under threat, said Chee-Kiang Lim, managing director China at Detroit-based consultancy Urban Science.
“The joint-venture policy was originally designed to compel foreign brands to share their brands and technology with local Chinese (automakers) in exchange for access to China’s large, growing auto market,” he said.
Now that Chinese automakers are more “confident that they have closed the gaps with or even surpassed their foreign partners,” he said, “we have to expect more JVs to unwind in the coming years.”
The bankruptcy for the Jeep venture is the latest chapter in a turbulent history for the first foreign brands to have invested in China, when it was an almost non-existent market for global automakers.
The former AMC invested in a Beijing Jeep joint venture in 1984, the first such deal for vehicle production in China by an American brand.
The operation went through ownership changes after AMC was acquired by Chrysler and then Chrysler was acquired by Fiat, which became Stellantis in 2021 after a merger with Peugeot.
Tesla is the only global automaker that was granted a waiver to produce cars in China without a joint venture.