Carmaker giant Stellantis may remove all production from China due to rising geopolitical tensions and competition with domestic rivals.
Chief Executive Officer Carlos Tavares announced his intentions at the Paris Auto Show on October 17. After shutting down the only Jeep plant in China this summer, Stellantis currently only has two brands remaining in the Chinese market, Peugeot and Citroën.
According to Daily Sabah, Tavares said sales of Jeep and Alfa Romeo vehicles built outside China were still profitable. He suggested a similar model could work with Peugeot and Citroën. Vehicles will get imported from the U.S. and Europe, eliminating the need for factories in China.
Stellantis is considering leaving as it watches growing geopolitical tensions, with Tavares stating that they want to avoid vulnerabilities. After the Ukraine-Russia lesson, Bloomberg noted that companies are calculating the sanction risks if China decides to make a move on Taiwan.
But sanctions are not the only reason Stellantis wants to pull out production from China. Tavares acknowledged unfair treatment compared to domestic rivals. In terms of import taxes, he suggested the levies from China should be equal to those imposed on Western vehicles in the country.
The CEO stated, “The red carpet is rolled out for Chinese manufacturers in Europe, and that’s not how we’re welcomed in China.”
Bloomberg said Stellantis is not the only international corporation that faces challenges to keep its position in China’s market. Volkswagen AG and General Motors also encounter rising competition with local manufactures, such as BYD and Geely Automobile, which have recently introduced new electric models.