2023-10-26 12:21:00
Two years. It took Carlos Tavares two years to completely change course in China, the world’s largest automotive market, where Stellantis’ market share did not even reach 1%. A market that has become very difficult, with political leaders uncompromising for foreign companies and local industrial giants in full expansion, ready to take advantage of the ban on thermal engines in Europe. “It is unthinkable that a company like ours would be so successful in North America, South America and Europe and not be successful in China,” confided the CEO of Stellantis to Point early 2021.
In the summer of 2022, exasperated by the “politicization of business” in China and tired of losing money, the king of automobile profitability ends the joint venture with Guangzhou Automobile Group (GAC), which manufactures and distributes Jeeps in the country (Cherokee, Renegade, Compass…). At the beginning of October 2023, it continues to unravel its alliance with its other Chinese partner, Dongfeng, a historic ally of Peugeot-Citroën. Stellantis sells to Dongfeng, its partner of thirty years, three factories based in Wuhan, Chengdu and Xiangyang which produce Peugeot and Citroën models. Officially, Stellantis no longer manufactures any vehicles itself in the Middle Kingdom…
An investment of 1.5 billion euros
Carlos Tavares ended up choosing another path, which he thinks is that of wisdom: taking a stake in a promising Chinese company specializing in electricity and promoting its European factories to help it conquer the world. He looked at several files. Ultimately, it is neither Aiways, the first Chinese start-up to introduce an electric vehicle on the European market in 2020, nor Nio, nor the giants Geely and BYD, already very powerful, on which Stellantis has decided to set its sights.
The manufacturer resulting from the merger between Fiat Chrysler and PSA is betting on Leapmotor, a young start-up located in Hangzhou, a city south of Shanghai known as the cradle of the commerce giant Alibaba founded by Jack Ma. Stellantis takes 21.2% of the capital of Leapmotor for around 1.5 billion euros, becoming the reference shareholder with two seats on the board of directors (out of a total of nine).
It is also creating a joint venture, Leapmotor International, 51% controlled by Stellantis and which will have “exclusive rights to manufacture, export and sell Leapmotor products outside of China”. His boss will be appointed by Stellantis. During a press conference on site, Carlos Tavares praised the company’s “good management of finances”, its “agility” and its “strong desire to grow profitably around the world”.
Leapmotor, a young shoot from Hangzhou
“This day marks a major milestone in the history of Leapmotor,” said Zhu Jiangming, CEO of Leapmotor, which he founded in 2015. Listed on the Hong Kong Stock Exchange since 2022, the start-up was looking for a partner. Present in the mid-high range, where the price war is currently raging in China, Leapmotor delivered around 111,000 vehicles in 2022. The company was still losing money last year. Its loss then reached around 650 million euros (5 billion yuan) for a turnover which jumped 300%, to 1.6 billion euros (12 billion yuan). Leapmotor now sells more than 10,000 electric cars per month in China and, says Stellantis, is starting to generate a positive gross margin.
“Leapmotor is the fourth player in the electric market in China. It’s a very great company created by an electronic engineer who constantly compares himself with Tesla and BYD to stay at the cutting edge of technology,” underlines a source close to the manufacturer. The Chinese start-up, whose batteries use lithium-iron-phosphate (LFP) technology, already has two factories – a third is under construction – giving a production capacity of around 500,000 vehicles per year.
In France, it markets the small electric city car T03, at 26,000 euros. At the last Munich motor show, it presented its C10 compact electric SUV and the C11, which has a range of more than 1,000 kilometers. They will likely be the spearheads of its conquest of the world, soon led by Carlos Tavares and the Stellantis teams.
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