Recently, Fiat Kleist Group and GAC are in discussions to stop the closure of its Guangzhou plant, and are also seeking to sell their 20% stake in GAC FCA. You know, GAC FCA is jointly invested by GAC Group and Fiat Chrysler Group to build about 17 billion yuan, in China has Changsha plant and Guangzhou plant two major production bases and an engine plant, the total production capacity of up to 328,000 vehicles, how in just a few years GAC FCA will be so defeated?
Unlike the decline in China, The Stellantis Group, the parent company of the Fiat Chrysler Group, has performed extremely well in the global market. In the first half of this year, the Stellantis Group achieved net revenues of €72.61 billion and net profits of €5.8 billion worldwide, generating a positive cash flow of €5.615 billion.
By region, North America is the most dazzling. In the first half of the year, the company sold 873,000 units. Its pickup brand RAM set a record for sales in the U.S. market, and its SUV model, the Jeep Wrangler 4XE, became the best-selling plug-in hybrid model in the United States in the second quarter. Sales in the European market were 1.664 million units, and sales in the South American market were 424,000 units. However, the Asia-Pacific market, which includes China and India alone, achieved sales of only 102,000 units, becoming the tail of the group's sales crane.
It is reasonable to say that the Stellantis Group, which has brands including Jeep, Maserati, Alfa Romeo and other brands, should not be such a situation in China. Indeed, in 2015, when GAC FCA achieved the launch of the production line, it mass-produced and launched models such as the Liberty Hero, the Guide, and the Grand Commander within one year. Sales were 179,900 units in 2016 and a new high of 222,300 units in 2017. However, in 2018, the situation took a sharp turn for the worse, from 222,300 units to 40,500 units in 2020. Since the beginning of this year, the performance has been even more dismal, with cumulative sales of 12,300 vehicles from January to July, and production has directly declined to 7898 vehicles, which is also far from the target of hundreds of thousands of vehicles when GAC FCA was founded.
The reason is that The Stellantis Group did not adapt to the development of the times, and in 2018, when the whole industry entered recession, GAC FCA did not forge ahead to carry out research and development upgrades, resulting in its models lacking competitiveness compared to competitors. At the same time, because the joint venture company Fiat Chrysler was busy merging with PSA Group, it also indirectly led to its lack of time to take care of the Chinese market. In addition to GAC FCA, Stellantis Group's joint ventures in China, such as DPCA and Changan PSA, have performed quite dismally, which can only show that the decline in the market is an external factor, and the real core reason is that there has been a misjudgment of the Chinese market within the Stellantis Group.
Of course, for the Chinese market, even if the performance is dismal, multinational car companies generally will not choose to exit directly like Suzuki. As the world's largest automobile consumer market, as long as the market share is increased by even 1%, then sales will usher in rapid growth. In July this year, Mu Anze, the newly appointed president of GAC FCA, announced at the Chengdu Auto Show that it will continue to implement the One Jeep plan, integrating the two concepts of Jeep imported cars and domestic cars, and Jeep will face consumers with a unified image in China.
Indeed, there are still many loyal fans of Jeep in China, but the market appeal of domestic Jeep is far less than that of imported models, and choosing to open up the quality and service of joint ventures and imported cars, GAC FCA is expected to usher in nirvana. But no matter what, Stellantis Group in China has gradually been marginalized has become a trend, in the new car manufacturing forces and the traditional car companies continue to change at the moment, GAC FCA wants to return to the peak of 2017 is afraid of difficulty, the transfer of 20% of the GAC FCA equity also fully implies that Stellantis Group itself is also somewhat unconfident in China's market, so how can it fight back?