Stellantis invests 1.5 billion euros in Chinese brand Leapmotors

China has already become the main protagonist of industrial activity in the motor world. Leapmotors has just sealed an important agreement with Stellantis to manufacture electric cars.

With a population of more than 1 billion inhabitants, China has become the world’s epicenter of car sales. The Asian giant has awakened from its slumber and, in just a couple of decades, has gone from not appearing on the list of the most commercial countries to becoming the industry leader. Its advanced technology and frenetic production pace seduce all brands. The agreements follow one another in a chain and the last one unites the Stellantis Group with Leapmotors. An agreement valued at more than 1.5 billion euros.

The French conglomerate, under the leadership of Carlos Tavares, has become one of the most important and influential groups in the industry. With 14 different brands under its umbrella, the consolidation of the PSA Group and FCA alliance has caused a great change. Despite this, the Chinese market has resisted for a long time, too long. Although they are already present with brands such as Citroën, Stellantis wants to expand its presence and, in the process, get something out of it along the way in the form of electrical technologies and developments.

Stellantis will take advantage of Leapmotor’s resources to introduce its brands in China

A few days ago the first rumors began to emerge about a possible negotiation. Today, both brands have confirmed the agreement. The European manufacturer gains access to the general shareholding of the Chinese company, acquiring 21% of the company for a value of 1.5 billion euros. In the same way, both companies, Stellantis and Leapmotor, will consolidate the formation of a new joint company based in Holland. The French will have control of 51% of this joint venture and the exclusive export rights, to sell and manufacture Leapmotor vehicles outside of China.

Stellantis invests leapmotors

Carlos Tavares has defended the deal as part of a larger strategy to penetrate the Asian market. “We haven’t had as much success in China as we wanted, so we prefer to rely on a Chinese partner. To win there it is better to do it with a local company.” For  Zhu Jiangming, CEO of Leapmotor, “this is a speed race. “We can help improve speed.” At the moment, no deadlines or possible partnerships have been revealed for the production of vehicles or the sharing of technologies that could lead to products destined for Europe. Surely at some point in this commercial history, we began to see Stellantis products developed in China.

This bilateral agreement is no surprise or novelty in the industry. Already in the recent past, we have seen similar businesses sealed. Volkswagen has taken over 5% of the XPeng brand to take advantage of its electric platform and resources. Audi has done the same with the SAIC Group, while Mercedes is in full negotiations with NIO to acquire rights and technologies. Amid this whirlwind of agreements and negotiations, the European Union has launched an investigation to determine whether Chinese brands are having an advantage in the electrical stage. It is not known how the possible sanctions may affect all these agreements.

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