A new model for capacity export. According to information obtained by Yicai, negotiations between Stellantis NV and Dongfeng Motor Group regarding the sharing of European factories are nearing completion. Sources indicate that Stellantis NV is expected to provide contract manufacturing services at its Rennes-la Janais plant in western France for Dongfeng Motor Group, assembling at least one model from Dongfeng's own brand primarily for sale in the European market. Currently, Stellantis NV is actively offering its four European plants to several Chinese automakers to address idle capacity. Potential Chinese buyers, besides the aforementioned Dongfeng Motor, include Leapmotor and BYD. In early May, to enhance capacity at Stellantis NV's Figueruelas plant in Zaragoza, Spain, the group's Opel brand will collaborate with Leapmotor to launch a new all-electric C-segment SUV, sharing capacity to reduce R&D and production costs. Simultaneously, Stellantis NV and Leapmotor also plan to integrate capacity at the Villaverde plant in Madrid, Spain. Earlier this month, Stella Li, Executive Vice President of BYD, stated in an interview that BYD is in discussions with companies including Stellantis NV to identify available idle capacity in Europe. Subsequently, BYD confirmed the accuracy of this information but offered no further details. According to its plan, Stellantis NV will announce a deep transformation strategy on May 21 (local time) to advance industrial alliances, streamline its brand portfolio, and reduce operational costs. The company's performance has been subpar over the past two years, particularly in 2025, when it reported a net loss of 22.332 billion euros, significantly impacted by missteps in its electrification strategy. The sources mentioned that Stellantis NV's performance decline necessitates adjustments and handling of idle capacity, while Chinese automakers, bolstered by their electric vehicles, are expanding in the European market. Therefore, Stellantis NV has chosen to engage with Chinese automakers to achieve a mutually beneficial outcome. Carlos Tavares, CEO of Stellantis NV, stated that such deep collaborations are a core corporate strategy aimed at achieving technological upgrades and supply chain optimization while revitalizing idle capacity to counter the impact of the strong rise of Chinese automakers. Currently, Chinese automakers can offer electric and hybrid models with significant price advantages while maintaining leading technological capabilities. From the perspective of Chinese automakers, as China's automotive industry enters a new phase of global expansion, one emerging trend is acquiring idle capacity from foreign automakers. Yang Yanding, General Manager of the Strategic Planning Department at Dongfeng Motor, mentioned during an interview at this year's Beijing Auto Show that capacity expansion abroad does not necessarily mean purchasing numerous factories overseas. He further stated, "Currently, many foreign automakers have excess factory capacity, with utilization rates as low as 50%. Following this logic, we can efficiently utilize overseas capacity resources through various models such as joint ventures, capacity leasing, and equity cooperation. The specific choice depends on each company's circumstances." Cui Dongshu, Secretary-General of the China Passenger Car Association, noted in an interview that Chinese automakers acquiring idle European factories is an efficient breakthrough model. Firstly, it allows Chinese automakers to avoid high tariffs on imported vehicles, significantly reducing export costs. Secondly, it improves approval efficiency, as factory modifications take about one year, much faster than the 3-5 years required to build new plants. Furthermore, automakers can revitalize capacity, gain access to local supply chains and skilled labor, enhance brand image, and deepen localization. However, Chinese automakers acquiring idle European factories also face certain challenges, such as high labor and renovation costs, the need to adapt to stringent EU regulations and union culture, and risks associated with technological and managerial integration. Nevertheless, Cui Dongshu believes that, overall, the benefits outweigh the drawbacks, making it a pragmatic choice for Chinese automakers to "break through barriers in the short term and establish deep roots in the long term" during their global expansion.
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