Stellantis & China

The figures discussed and presented here are for vehicles assembled in China. Stellantis was formed in 2021.

PSA has had a long and successful time in China, Citroën in particular. The latter was one of the best selling brands in China during the early 20th century. Peugeot came in a little later and eventually overtook its sibling in 2014. 

Fiat was also an early success in China but pulled out of local assembly in 2007 before returning in 2012. Jeep started assembly in 2015 although nearly 60,000 imported vehicles were sold in China in 2013. It was the largest market outside of the US for Jeep so the logic of avoiding import duty and going to manufacturing in China made sense. 

By 2015 Peugeot production in China exceeded 400,000 units and Citroën was just under the 300,000 mark. That equates to 700,000 units (maths is my strong suit). On the Fiat-Chrysler side, Fiat sales slumped over 50% in 2015 but the cavalry had arrived to save local production in the form of Jeep. 

From this point, things started to unravel for PSA with production in steep decline. Fiat disappeared and Jeep took off but that didn't last long either. By the time Stellantis was formed, its combined presence in China was minimal. There has been a slight upturn recently for Peugeot and Citroën but it's still small time stuff.

For Stellantis ending production in China and only importing is a possibility. The problem with that is import duty. Amazingly China doesn't face the same duty when exporting to Europe. Why did the EU play hardball with the UK while allowing such an imbalance with China? 

The answer is the UK had a weak bargaining position and China has a strong one. Car makers - notably German - make big money manufacturing in China and they don't want to risk that by matching China's import duty. German car companies have openly stated they don't want to upset China, saying that they simply can't afford to. 

So while Carlos Tavares has stated publically there should be an even playing field with tariffs, that seems unlikely. Chinese cars are starting to pour into Europe and putting up import duty to stem the flow would have the German car makers in a hot sweat. Stellantis would find exclusively importing into China a tough assignment. Losing sales to Chinese imports in its backyard only adds to the problem.