PARIS/MILAN: Stellantis and China's Dongfeng said on Wednesday they plan to form a joint venture in Europe, including potential production in France, offering another glimpse into the French-Italian automaker's longer-term strategy.
The two groups signed a preliminary deal covering sales and distribution, manufacturing, purchasing and engineering activities focused on Dongfeng's new energy vehicles. The JV will be owned 51% by Stellantis and 49% by Dongfeng. Stellantis already has a joint venture with its other Chinese partner, Leapmotor, the scope of which is set to expand beyond distribution into manufacturing, with plans to jointly build two models in Spain and possibly later transfer ownership of a Stellantis factory in the country to the JV.
Adding to its recent flurry of partnership announcements, Stellantis also said on Wednesday it had entered a non-binding agreement with Jaguar Land Rover (JLR) to collaborate on product and technology development in the United States.
"By working with partners to explore synergies in areas such as product and technology development, we can create meaningful benefits for both sides," Stellantis CEO Antonio Filosa said in a statement.
ADDRESSING UNUSED CAPACITY IN EUROPE
At its capital markets day on Thursday, Filosa is expected to tell investors how Stellantis plans to regain market share and sales in its main U.S. market.
In parallel, the two Chinese JVs will help the Jeep-to-Peugeot maker fill underutilised capacity at its European factories. Stellantis on Tuesday also announced plans to begin manufacturing stripped-down, cost-efficient small e-cars in Italy.
Dongfeng is a relative newcomer to Europe and only sells cars in a handful of markets, including Italy and Poland.
But the state-owned Chinese carmaker has global ambitions, targeting annual sales of at least four million vehicles by 2030, with more than 40% outside China.
Deals like Wednesday's will help Chinese automakers quickly expand overseas and avoid European Union tariffs on EVs, at a time when they are facing a brutal price war at home.
SHARED PRODUCTION IN RENNES, FRANCE
The JV with Stellantis will seek to sell Dongfeng's premium Voyah-branded NEVs in some European markets, the companies said, confirming a Reuters report. It builds on a deal announced last week under which Dongfeng will make Jeep and Peugeot brand cars in China.
The partners plan to explore local production of Dongfeng models at Stellantis' Rennes plant in France, in compliance with EU requirements.
Dongfeng still owns a stake of just over 1% in Stellantis, having been a longtime investor and partner with Peugeot maker PSA, which in 2021 merged with Fiat Chrysler to form Stellantis.
