Stellantis Corporation, following the Volkswagen concern, began investing in the best Chinese electric vehicle startups in order to maintain influence in the Chinese market. Stellantis will also oversee Leapmotor's expansion into foreign markets: a joint venture has been announced, Leapmotor International, which will be managed by a CEO appointed by Stellantis.
I remember that a year ago, the head of Stellantis, Carlos Tavares, demanded that the EU authorities protect the market from the invasion of Chinese cars, but European bureaucrats, as we know, work very slowly, while young Chinese companies, on the contrary, work very quickly. In general, Tavares decided to use the ancient, but still working method “if you can’t win, lead,” and now the Stellantis corporation itself will promote cars from the Chinese company Leapmotor outside China.
Leapmotor is considered one of the most successful and promising Chinese startups; it was founded in 2015 by electronics engineer Zhu Jiangming. The first Leapmotor model was launched into production in 2019, now there are only four models in the range, all of them were initially electric; the most popular C11 crossover and C01 sedan also have plug-in hybrid versions, where the gasoline internal combustion engine is used as an electric reserve extender progress. In the first three quarters of this year, Leapmotor, according to CAAM (China Association of Automobile Manufacturers), sold 88,827 vehicles in China (+1.4% compared to last year).
Leapmotor's strengths include a good price/quality balance, its own production of microelectronics (including processors) and high rates of technical evolution: in July of this year, the Chinese company introduced the third generation of its own modular platform Leap 3.0, and by 2025 it will be ready fourth. At the presentation of the Leap 3.0 platform, it was immediately said that the platform was for sale, the Volkswagen concern almost became its buyer, but Stellantis made a more profitable, comprehensive offer to Leapmotor for joint business development — today the newly minted partners officially announced the deal. Volkswagen, by the way, in July announced the purchase of a 4.99% stake in the Chinese startup Xpeng and will make its own electric cars for the Chinese market on its platform.
Carlos Tavares and Zhu Jiangming
The cooperation between Stellantis and Leapmotor is much more extensive and promising than the cooperation between Volkswagen and Xpeng. Stellantis will invest 1.5 billion euros in Leapmotor, will become the owner of 21% of the shares of the Chinese company and will receive two seats on its board of directors. Stellantis will use Leapmotor's technology to develop its business in China, but it has not yet said how. Stellantis will also take over the promotion of Leapmotor cars outside of China as part of a new joint venture, Leapmotor International, in which Stellantis will own a controlling stake (51%) and whose CEO will also be appointed by Stellantis. Leapmotor International will have exclusive rights to export, sell and manufacture Leapmotor models outside of so-called Greater China (which includes Hong Kong, Macau and Taiwan).
We would like to add that Stellantis' own brands in China are in trouble, despite huge investments in the past decade and the creation of exclusive model ranges for this market. Peugeot sales in China in January-September this year amounted to 27,372 units. (-31.1%), Citroen — 21,446 units. (-49.7%), DS — 434 pcs. (-65.1%). The Chinese state corporation Dongfeng, which was and still remains the main partner of Stellantis in China, is also rapidly losing market share: sales of cars under the Dongfeng brand in the first three quarters of this year collapsed by 51.4% to 159,213 units, which partly explains the announcement at this week, there was a massive release of new Dongfeng models on the Russian market — the products unclaimed in China need to go somewhere.
In general, Carlos Tavares, deservedly considered one of the most outstanding top managers of our time, once again came to the rescue in time and received a much more promising Chinese partner with good global prospects than Dongfeng.
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