Stellantis, Leapmotor to soon launch Euro JV
BY PETER BARNWELL | 9th May 2024
THE deal struck by Stellantis last October, when it bought a 21 per cent stake in Chinese automotive manufacturer Zhejiang Leapmotor Technology for $US1.6 billion ($A 2.4b), looks finally set to be consummated under a new joint-venture company called Leapmotor International.
It will give Stellantis access to lower cost Leapmotor battery electric vehicle (BEV) technology and production, facilitating a catch-up with leading Chinese BEV manufacturers, access to the Chinese market with competitive vehicles and potentially cheaper vehicles for Europe and elsewhere.
For Leapmotor, the JV secures a way into the European market by manufacturing and selling its vehicles on the continent.
Stellantis will hold a 51 per cent stake in the European manufacturing and sales venture called Leapmotor International with a plant located in Poland building the Leapmotor T03 mini BEV initially from complete knock down (CKD) kits with production expected to commence in 2025.
In something of a role reversal and a first for a Western car-maker, provisions of the JV give Stellantis exclusive rights to build, export and sell Leapmotor products outside China.
In addition to Europe, the JV has eyes on markets in the Middle East, South-East Asia and Latin America.
The Leapmotor T03 and C10 SUV will likely be fully imported from China – in both BEV and hybrid form – for European consumption before production starts in Poland.
Leapmotor International will challenge budget brands in Europe such as Renault’s Dacia – which recently started selling the Chinese-made Spring BEV on the continent – in a situation considered ironic given Stellantis was recently rumoured to be in talks with the French manufacturer regarding a possible merger.
Before Stellantis was formed by merging Italian-American conglomerate FCA with French group PSA, both parties had a crack at the Chinese market through their various brands.
Its share has been sliding since the heady days of 2010 when it was selling 700,000 Peugeot and Citroen vehicles a year in China, while Jeep has also been a casualty of the ultra-competitive Chinese market and withdrew in 2022 citing various reasons.
Automotive News Europe (ANE) quoted Stellantis CEO Carlos Tavares as saying the company "can benefit from Leapmotor’s lower-cost production and technology … the Chinese offensive is visible everywhere”.
"With this deal we can benefit from it rather than being the victims of it."
In another ANE report, Stellantis CFO Natalie Knight referred to Leapmotor as the group’s “15th brand” which could be “slotted in below Citroen and Fiat in the group's cluster of volume brands”.
“Citroen, Fiat and Opel/Vauxhall will all launch vehicles on the low-cost Smart Car platform this year.”
Ms Knight said that the first sales and revenue from the joint venture would appear in the second half of the year, but she said the impact on Stellantis' balance sheet "won't be huge" at first.
In addition to more minicars under development in China, Leapmotor International will cover different segments including SUVs and crossovers with all models available in right- and left-hand drive.
Existing Stellantis sales channels will be used for Leapmotor International products starting later this year from dedicated spaces within outlets and no cross-model competition between the JV partners.
Instead, other global brands will be targeted and it is anticipated the JV could reach 500,000 sales a year by 2030 drawn from Leapmotor models including the T03, C11 small SUV, C16 medium SUV and a midsize sedan called the C01.
