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Carmaker Stellantis is expanding its partnership with China’s Leapmotor, in a move that will help secure the future of its two plants in Spain and the nearly 6,000 people they employ.
The group, which owns the Fiat, Peugeot and Jeep brands, said it planned to transfer ownership of one of the plants, in Madrid, to its Chinese partner.
Leapmotor will start production at the facility from 2028, including of a model that will be sold in Europe and other markets outside China. The Madrid plant employs about 1,500 people and had been due to stop manufacturing the Citroën C4, which accounts for most of its production.
The collaboration will also involve producing a new jointly developed electric SUV under the Opel brand at the other plant, in Zaragoza, which already builds Leapmotor’s B10 model and employs 4,400 people.
The two companies will also begin joint purchasing of parts to boost their cost competitiveness.
The deal is a key part of Stellantis chief executive Antonio Filosa’s plan to turn around the group, which has struggled to revive sales in Europe and the US.
“Today’s announcement reflects our intent to deepen our partnership and take one more step towards even greater collaborations,” Filosa said.
Stellantis was one of the first western carmakers to strike a partnership in Europe with a Chinese manufacturer, buying a 21 per cent stake in Leapmotor in 2023. Since then, rivals including Ford and Nissan have also been negotiating with Chinese companies to take up capacity at underused plants in Europe and the UK.
Chinese carmakers, including Leapmotor, have been rapidly expanding into Europe and other international markets as sales and profits have come under pressure in their home market.
The increased production in Europe will also help Leapmotor to meet EU “Made in Europe” manufacturing targets and access government subsidies in the continent.
Last month, Stellantis said it would end car assembly at its Poissy plant outside Paris and repurpose it with half as many employees.
Stellantis is separately in discussions with Dongfeng — its former joint venture partner in China, which retains a stake in the European carmaker — about expanding their collaboration in European production, although its Poissy factory is not included.
