The European automobile concern Stellantis NV will close the Chinese joint venture engaged in the production and sale of Jeep brand cars in China, as it was unable to move forward in increasing its share in it to the controlling one.

According to a press release from Stellantis, the automaker will focus on supplying Jeep electric vehicles manufactured outside the country to China.

In January of this year, Stellantis, which also owns the Chrysler, Dodge and Fiat brands, said it plans to increase its stake in a JV with China’s Guangzhou Automobile Group Co. (GAC Group) to 75% from 50%. The GAC Group responded the same day by expressing regret that the publication of the statement was not agreed with it.

„The lack of progress on Stellantis’ previously announced plan to acquire a majority stake in a JV with GAC Group has forced the companies to begin discussions about terminating the JV,” the European automaker said in a press release.

„Stellantis plans to work with the GAC Group to wind down in an orderly manner the JV, which was established in March 2010 and has been unprofitable in recent years,” the automaker said in a statement.

Stellantis’s expenses related to the closure of the Chinese JV will amount to about 297 million euros and will be reflected in the financial statements for the first half of the year.

Some of the foreign automakers have decided to take control of their Chinese joint ventures, taking advantage of China’s auto industry incentives, The Wall Street Journal notes. Thus, BMW AG paid about $4 billion to increase its stake in the JV with Brilliance China Automotive Holdings Ltd., and Volkswagen AG announced its intention to increase its stake in the JAC with JAC Motors to 75% from 50%.

According to experts, it is important for Western automakers to control joint ventures in China, as this can significantly speed up decision-making.

Shares of Stellantis added 3.1% in trading on Monday. Since the beginning of this year, their value has decreased by 36%.