Another "New Force" Emerges

Author | Zhou Zhiyu

The joint venture camp has gained another "new force."

Wallstreetcn learned on August 20 that Dongfeng Peugeot Citroën Automobile Technology (Wuhan) Co., Ltd. was officially established on the same day. The new company is jointly funded by Dongfeng Motor Corporation, Stellantis NV, Dongfeng Peugeot Citroën Automobile (Shenlong Auto), Changjiang Industry Group, Wuhan Financial Holdings Group, and Wuhan Economic Development Zone Industrial Investment Group, with a registered capital of approximately RMB 8.2 billion.

The "newness" of Shenlong Technology lies in its joint venture model and development path. It initially plans to launch two Jeep and two Peugeot new energy vehicles, scheduled for phased introduction starting in 2027. These vehicles will be produced at Shenlong Auto's Wuhan factory and sold globally through Stellantis's sales network.

At the establishment ceremony, Stellantis CEO Antonio Filosa described Shenlong Technology as the "exclusive execution platform for a brand-new cooperation project." The new company undertakes complete vehicle R&D, industrialization investment, and new energy vehicle sales. The legacy Shenlong Auto is responsible for production, Dongfeng provides new energy and intelligent connected vehicle technologies, while Stellantis contributes the Jeep and Peugeot brands along with its global distribution channels.

In the past, joint ventures typically operated with a complete automaker as the cooperative unit, where the foreign partner provided platforms and models, and the Chinese partner contributed factories and distribution channels to open up the Chinese market, with both sides relying on Chinese sales to recoup investments. In contrast, Shenlong Technology focuses on four specific models, unbundling R&D, manufacturing, branding, capital, and sales, and assigning each function to the shareholder with the comparative advantage.

Yang Qing, Chairman of Dongfeng Motor Corporation, summarized this division of labor as "Sino-foreign linkage, central-local coordination, and industry-finance collaboration." Three local industrial capital entities from Hubei Province and Wuhan City collectively hold approximately 48.8% of the shares, Shenlong Auto holds about 24.1%, while Dongfeng Motor Corporation and Stellantis each hold approximately 13.5%.

The six shareholders have thus formed a new exchange relationship: Dongfeng needs overseas brands and channels, Stellantis needs Chinese new energy technology and cost advantages, local capital seeks industrial projects, and the legacy Shenlong Auto requires new products to improve factory utilization rates.

Judging from the public timeline, the organizational implementation of Shenlong Technology has been remarkably swift. The cooperation agreement was signed on May 15, and the project company was established just 97 days later. This speed ranks among the fastest for similar "Sino-foreign joint ventures."

This speed stems from the project-based arrangement. Shenlong Technology does not need to build factories, R&D capabilities, or sales networks from scratch; instead, each party simply contributes its existing resources and responsibilities to the project company.

The decision to establish a separate company arises because traditional Shenlong Auto's sales in China can no longer support a new round of investment. In 2015, Shenlong Auto's sales reached 710,700 units; by 2025, this figure had dropped to only 51,500 units, less than one-tenth of its peak. Relying solely on the Chinese market makes it difficult to amortize the development costs of four new energy vehicles.

The technological dynamic has also reversed. Dongfeng previously disclosed that Shenlong Auto's R&D functions have been fully transferred to the Dongfeng R&D Institute, and the Dongfeng new energy platform will be introduced in 2026. Consequently, foreign brands are no longer tied to foreign platforms. New vehicles can be developed using Chinese technology and supply chains, badged with Jeep and Peugeot logos, and then seek global sales through Stellantis's channels.

This move also marks the return of the Jeep brand. In 2022, due to consecutive losses at GAC Fiat Chrysler, Stellantis terminated the joint venture production of Jeep in China and recognized an impairment of approximately EUR 297 million, subsequently maintaining its Chinese business primarily through imports. Four years later, Jeep resumes production in China, but not by following the old path of foreign product introduction and Chinese manufacturing and sales. Instead, new vehicles utilize Dongfeng technology, existing factories handle production, and Stellantis provides brands and channels.

During its 2026 Investor Day, Stellantis stated that the four models would be developed and produced at "Chinese costs," with the project primarily financed by the Shenlong system. It is expected to become an incremental contributor to the group's sales, profits, and electrification transformation. Stellantis does not need to re-establish a capital-intensive Chinese operation for Jeep; for Shenlong Auto, access to the global market is a prerequisite for the continued operation of its existing capacity.

Shenlong Technology is not an isolated case. Stellantis and Leapmotor established Leapmotor International, placing Leapmotor's products and Stellantis's global channels into a new joint venture. Similarly, Changan Mazda will sell the EZ-6, which utilizes Chinese electrification technology, to Europe under the name Mazda6e. The former sends a Chinese brand overseas, while the latter embeds Chinese technology into a foreign brand. Shenlong Technology exhibits characteristics of both.

A "new force" in joint ventures is thus taking shape. These ventures no longer revolve around simple divisions of labor based on equity ratios and the Chinese market. Instead, they configure technology, capital, brands, production capacity, and channels around specific vehicle models. The purpose of cooperation has also extended beyond being limited to the Chinese market, evolving towards developing cars in China for global sales.

According to the goals set by Stellantis for its collaborations with Dongfeng and Tata Motors, the target is to sell 100,000 localized models globally by 2028.

After forty years of joint ventures, the scarce resources exchanged between the two sides have changed. In the past, foreign partners exchanged technology and brands for access to the Chinese market and production capacity. Today, Chinese new energy platforms, development speed, and supply chain costs have become capabilities sought by multinational automakers, while foreign partners contribute brands and global channels to achieve commercialization.

For China's automotive industry, going global no longer means merely exporting vehicles under independent brands. Technology, supply chains, and manufacturing capabilities are now beginning to enter the global product systems of multinational automakers.

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