A significant development that could shift the balance in the European automotive sector has occurred. Last week, Stellantis, which signed an agreement with Chinese automotive giant Dongfeng to produce Jeep and Peugeot models in China, has now paved the way for Chinese brands to manufacture in Europe.
Thanks to the new joint venture established between the two companies, Voyah, a premium brand under Dongfeng, will now be able to produce cars in Europe.
Voyah Models to be Produced in France
Voyah, the luxury car brand founded in 2019, has received permission to produce vehicles at Stellantis's Rennes factory in France. Although the specific models to be produced have not yet been announced, it is stated that all vehicles will belong to the NEV (New Energy Vehicle) class.
The NEV definition, widely used in China, includes plug-in hybrid, fully electric, and range-extended electric vehicle (EREV) models.
Stellantis will hold a 51 percent stake in the established joint venture, thus retaining control over the operation.
Capacity for Stellantis, Tax Advantage for Dongfeng
The agreement offers significant advantages for both parties. For Stellantis, the capacity of the Rennes factory, which currently only produces the Citroen C5 Aircross, can be utilized more efficiently.
For Dongfeng, producing in Europe carries a much more critical meaning. This is because the Chinese manufacturer will thus be able to avoid the additional taxes imposed by the European Union on electric vehicles of Chinese origin.
The Voyah brand is not expected to be sold across all of Europe. The company is reportedly focusing specifically on Western and Northern European markets.
Dongfeng-Branded Models Could Be Next
The partnership is expected to grow further in the future. According to incoming information, Dongfeng may also produce its own-branded electric models at the facility in Chartres-de-Bretagne, France. The agreement does not only cover production; Stellantis's European dealer network will also be used for sales and distribution processes.
A Long-Term Risk?
While European manufacturers opening their factory doors to Chinese brands may seem profitable in the short term, it could create serious competition problems in the long run. As European-based manufacturers, especially those looking to utilize idle factory capacity, are expected to form more partnerships with Chinese brands, this situation could completely change the balance of the European automotive sector in the future.
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