Stellantis, the owner of Jeep and Fiat, said on Wednesday that it has formed a joint venture with China’s Dongfeng to collaborate on manufacturing, sales, and engineering operations in Europe, News.Az reports, citing AFP.

The agreement, aimed at boosting sales as the European Union pushes automakers to increase production of clean-energy vehicles, will see Dongfeng’s Voyah electric vehicles produced at Stellantis’s plant in Rennes, western France, for the European market, according to a joint statement from the companies.

By manufacturing locally in Europe, Dongfeng will be able to avoid high EU tariffs imposed on Chinese electric vehicle imports, which were introduced to protect domestic automakers.

The move marks the latest initiative by Stellantis CEO Antonio Filosa to revive sales and profitability at the world’s fourth-largest automaker, particularly in Europe, where the transition away from combustion engines has faced challenges.

Earlier this month, Stellantis announced another agreement with Dongfeng to produce Jeep and Peugeot models for the Chinese market and to expand cooperation in research and development.

Meanwhile, Chinese automakers are increasingly looking toward Europe and other export markets as domestic demand weakens amid slowing consumer spending.

Brands such as BYD, Chery, Geely, Leapmotor, Jaecoo, and XPeng have rapidly expanded their presence in Europe after being largely unknown in the region just a few years ago.

Stellantis will lead the Europe joint venture with a 51 percent stake, while Dongfeng will have 49 percent. Financial details were not disclosed.

"With this new chapter in our collaboration, we will give our customers an even greater choice of competitive products and pricing, leveraging the best of Stellantis's global footprint alongside Dongfeng's access to China's advanced new energy vehicles ecosystem," Filosa said in a statement.

Dongfeng's chairman Qing Yang said in the statement: "Through coordination in technology, branding, and global markets, it will unlock greater value from the joint venture, accelerate Dongfeng's global expansion, (and) support Stellantis's global strategic shift and China presence."

The Rennes plant has been operating well below capacity for years as demand in the European auto market remains well below pre-Covid levels, and currently produces only a high-end Citroen SUV.

Stellantis announced Tuesday that it would start building smaller, low-cost electric cars for the European market as buyers increasingly look to rival Chinese models.

EU rules call for 90 percent of all cars sold in the bloc to be electric by 2035, and the European Commission recently created a new, tax-friendly category for small EVs to encourage demand.

Stellantis, formed from the merger of France's PSA and Italy-based Fiat Chrysler five years ago, said its Dongfeng Peugeot Citroen Automobile joint venture had built over 6.5 million cars in China since its creation 34 years ago.

Filosa is set to lay out the company's strategy to jump-start sales and profits for its 14 brands at an investors' day in Michigan, the heart of the US auto industry, on Thursday.

News.Az 

By Nijat Babayev