Stellantis (STLA.US) signs a 1 billion euro agreement with Dongfeng Group to start production of new energy vehicles for Jeep and Peugeot in China next year.

Stellantis (STLA.US) and Dongfeng Group are further deepening their cooperation that has lasted for more than 30 years. The two sides have signed an agreement to jointly produce Jeep brand new energy off-road vehicles and Peugeot brand new energy vehicles in China starting from 2027, relying on the Dongfeng Motor Corporation's Wuhan plant. The products will be targeted at the Chinese domestic market and exported overseas. According to the statements released by both parties, the total investment in the project exceeds 8 billion RMB (approximately 1 billion euros), with Stellantis expected to contribute about 130 million euros. The production plan includes two Jeep new energy off-road vehicle models and two Peugeot new energy vehicle models. This marks the formal inclusion of the Jeep brand in the production system of Dongfeng Motor Corporation, and is a major restart of their joint venture cooperation after years of silence. The relationship between Stellantis and Dongfeng Motor Corporation can be traced back to the early 1990s, when the predecessor of Stellantis, the PSA Peugeot Citron Group, formed a joint venture company, Dongfeng Peugeot Citron Automobile, with Dongfeng to enter the rapidly growing Chinese market. However, in recent years, with the intensification of competition in the Chinese market, both their sales and production have significantly declined. In order to reverse this trend, Stellantis is accelerating its utilization of the technological and industrial advantages of its Chinese partners. Last month, Stellantis explicitly stated that it will use Dongfeng's technology to produce Peugeot brand vehicles in China. At the Beijing International Auto Show in April of this year, the Peugeot brand also unveiled two new concept cars, signaling the determination of this Franco-Italian automotive giant to re-enter the world's largest automotive market after years of weak sales and business restructuring. On the day of the signing, the two parties also signed a memorandum of understanding aimed at further strengthening their cooperation. At the same time, Stellantis is actively deepening its relationship with Chinese car manufacturers, having recently announced a collaboration with LEAPMOTOR (09863) in Spain to produce two vehicle models.