Stellantis gains foothold in China with $1.6 billion stake in EV maker Leapmotor
(Reuters) -Stellantis NV on Thursday announced a 1.5 billion euro ($1.6 billion) deal to acquire a 20% stake in China's Leapmotor (HK:9863) Technology in a move that gives the European automaker a vital foothold in the world's largest auto market.
The Chinese EV maker also announced the formation of a joint venture with Stellantis (NYSE:STLA), in which the Chrysler parent will own a 51% stake giving it exclusive rights for the export and sale, as well as manufacturing, of Leapmotor products outside Greater China.
The Netherlands-incorporated joint venture is expected to start its export business in the second half of 2024 and its head will be appointed by Stellantis, Leapmotor said. Stellantis would also have two seats on its board of directors.
«Through this strategic investment, we can address a white space in our business model and benefit from Leapmotor's competitiveness both in China and abroad,» Stellantis CEO Carlos Tavares said.
Stellantis, formed at the start of 2021 through the merger of France's PSA with Fiat Chrysler (FCA), has struggled to sell cars in China and has been looking to reshuffle its strategy in the country where it has a joint venture with Dongfeng.
The group, whose brands include Fiat and Peugeot (OTC:PUGOY), said a year ago it was closing its joint venture that makes Jeeps in China with Guangzhou Automobile Group amid disappointing results.
The group and rivals such as Renault (EPA:RENA) have been concerned about growing competition from cheap Chinese electric cars in Europe, a worry is shared by the European Commission which has launched an anti-subsidy probe into whether to set tariffs to shield European producers from Chinese EV imports.
Leapmotor said last month it was looking to
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