Stellantis and Dongfeng have just signed an agreement to produce Jeeps and Peugeots in China, and then bring them from China

Stellantis and Dongfeng have signed an agreement of production valued at more than 8 billion yuan (approximately 1 billion euros) to manufacture four new vehicles in China under the Jeep and Peugeot brands. This initiative will be channeled through Dongfeng Peugeot Citroën Automobile (DPCA), the joint venture that both companies have had for more than three decades.

Penetrating China. This agreement is Stellantis’ clearest commitment to adapt to the new reality of the sector. And instead of competing head-on with Chinese manufacturers, the group chooses to rely on its technology and production capacity. The Financial Times point that Chinese buyers have turned their backs on foreign brands, whose market share fell to approximately 30% last year, compared to 64% in 2020. In such an environment, growing alone is almost impossible, so Stellantis has used the classic “if you can’t beat the enemy, join him.”

A strategic agreement. The four vehicles will be new energy vehicles (NEV), a category that includes pure electric vehicles, plug-in hybrids and models with a combustion engine acting as a battery generator. The two Peugeots will be based on the design language that the brand presented at this year’s Beijing Motor Show with the Concept 6 and Concept 8, according to account the CnEVPost media. The two Jeeps will have an off-road profile.

According to share According to the Financial Times, production will be destined for both the Chinese market and export, in the latter case for destinations such as Southeast Asia, the Middle East and Latin America. The two companies have also agreed to explore broader cooperation outside China. In addition, as the media reports, Stellantis is simultaneously studying transferring capacity from its Rennes plant, in France, to Dongfeng.

Jeep’s return to China. The agreement represents the return of the brand’s local production in the country. Jeep abandoned manufacturing there in 2022, when the joint venture was dissolved that Fiat Chrysler (precursor of Stellantis) maintained with GAC. Since then, Stellantis had been importing the vehicles, a formula that was already much less competitive due to price.

Between the lines. Dongfeng assumes most of the disbursement, while Stellantis contributes around 130 million euros. There are already clues as to who has the productive and technological capacity, and who provides the brand value. The agreement also benefits from the industrial policies of Hubei province and the city of Wuhan (where the joint venture has its plant), something that has generated criticism in Europe and the United States by interpreting that Western manufacturers are taking advantage of Chinese state subsidies.

For Dongfeng, the pact comes at a delicate time. And the manufacturer has fallen behind other large companies such as BYD or Leapmotor, and now the state firm needs both income and international projection. Dongfeng President Qing Yang account that the agreement will be “beneficial for both parties.”

Movements. Stellantis has been accelerating its alliances with Chinese partners for weeks. Only last week it announced that it was deepening its collaboration with Leapmotor, in which it has 21% of the capital. The brand will hand over the Villaverde plant, in Madrid, and will expand lines in Zaragoza. That makes Stellantis the first major Western manufacturer to offer European production capacity to a Chinese brand, according to stand out from the Wall Street Journal.

Antonio Filosa, CEO of Stellantis, who foresees present its new long-term strategy on May 21has repeated on several occasions that alliances will be a central pillar of the group’s future, a group that we remember closed 2025 with net losses of 22.3 billion euros.

And now what. The big question is whether the models leaving Wuhan will have enough Jeep and Peugeot DNA to appeal to the global buyer, or whether they will in practice be Chinese vehicles with a European logo. With Dongfeng taking on most of the funding and technology development, the answer points more towards the latter. We will have to wait to find out how the play ends up turning out.

In Xataka | Google gives Android Auto its biggest update yet: new interface, YouTube, Maps redesign, and lots of AI