Stellantis opens talks for Dongfeng to take over underutilized assembly lines in Europe in exchange for technology and market
Stellantis is in advanced talks with China’s Dongfeng for a cross-production deal aimed at tackling two of the group’s chronic problems: the idleness of European factories and low penetration in the Chinese market. According to sources close to the talks, heard by Bloomberg, the agreement would allow the Chinese automaker to use the surplus capacity of Stellantis’ plants in Europe to manufacture its own models, circumventing the recent import tariffs imposed by the European Union.
In return, Stellantis would start producing vehicles of its brands in Chinese territory using Dongfeng’s infrastructure. The strategy seeks to reduce fixed costs in regions such as Italy and Germany, where Chinese representatives have already carried out technical visits to assess the feasibility of assembly. The move is seen as essential for brands facing volume difficulties, such as Maserati and Alfa Romeo.
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The initiative deepens Stellantis’ asset-light strategy in China, where the group already has a similar partnership with Leapmotor. The aim is to transform Dongfeng from a long-standing joint venture partner, which began in the 1990s and has been weakened over the past decade, into an industrial ally to face aggressive competition from brands such as BYD.
While North America remains the group’s main financial engine, the pressure for efficiency in Europe has increased after successive declines in global deliveries. The CEO of Stellantis is expected to detail the next steps of this restructuring during the presentation of financial results and strategic guidelines scheduled for May. The negotiations, however, have not yet been concluded and may change as political pressures in Europe advance.
