Stellantis dealers seek compensation over China Jeep failure

Chinese dealers selling Chinese-made Jeep vehicles are seeking millions of dollars in compensation from Stelantis after the automaker halted production of the brand in China, according to a letter signed by the dealers seen by Reuters. ing.

Stellantis is reviewing its strategy in China after agreeing in October to file for bankruptcy of the Jeep joint venture with local partner Guangzhou Automobile Group (GAC).

Stellantis has since said it will pursue an import-based business model in China.

According to a letter signed by 26 dealers as of Tuesday, the “unilateral” decision to end partnerships with dealers has cost their businesses and led to layoffs.

Stellantis declined to comment on the matter, but said in an emailed statement that it complies with Chinese law and that the joint venture’s bankruptcy filing is undergoing local court proceedings.

GAC declined to comment. Stellantis announced the end of his JV with GAC in July.

Cao Wei, president of Lianyungang Xuncheng Auto Sales and Service and one of the organizers of the letter, told Reuters that more dealers would join the petition and eventually receive a total of 900 million yuan from Stellantis ( He said he estimated he would seek $130 million in compensation.

According to the letter, they are asking Stelantis to pay 18 million yuan for each affected store to cover losses such as initial investment and severance payments, return security deposits and pay sales rebates.

Cao said he rejected what Stellantis called a “basic bill.” This included security deposits and sales rebates, which the JV refused to pay to at least 50 dealers authorized to sell Jeep vehicles made in China.

Jeep Venture’s Chinese shareholders agreed to pay 50 percent of its bills to all dealers, but Stellantis refused to pay the rest because it was not recognized as an authorized dealer, Cao said. .

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