GAC FCA officially declared bankruptcy!
On July 8, the administrator of GAC Fiat Chrysler Automobile Co., Ltd. (hereinafter referred to as “GAC FCA”) announced that because GAC FCA no longer has the possibility of reorganization, according to the opinions of some creditors and after discussion by the creditors’ committee, the administrator has applied to the Changsha Intermediate People’s Court to rule to declare GAC FCA bankruptcy.
Image source: GAC FCA manager official Weibo
According to the information, at the first creditors’ meeting held by the Changsha Intermediate People’s Court, the “Bankruptcy Estate Distribution Plan” formulated by the administrator has been voted and approved by the creditors’ meeting. On June 27, 2025, the Changsha Intermediate People’s Court has ruled to approve the administrator’s application.
According to the Changsha Intermediate People’s Court’s Civil Ruling (2022) Xiang 01 Po No. 214-2, according to the liabilities of GAC FCA, the audit report, the asset appraisal report and the results of the administrator’s asset inventory of GAC FCA, GAC FCA cannot pay off its debts due and its assets are insufficient to pay off all debts, nor do it have the conditions for reorganization and settlement, and meet the statutory conditions for declaring bankruptcy. In accordance with the provisions of Article 2, Paragraph 1 and Article 107 of the Enterprise Bankruptcy Law of the People’s Republic of China, the ruling is as follows:Declare GAC Fiat Chrysler Automobile Co., Ltd. bankrupt!
This news marks the final conclusion of this joint venture car company, which was once popular in the Chinese market.
GAC FCA’s predecessor, GAC Fiat, was established in March 2010 as a joint venture between GAC Group and Fiat Group with a 50:50 equity ratio. In 2014, the Fiat Group completed the acquisition of Chrysler, and GAC FCA became the production base of Fiat Chrysler Automobiles (FCA) in China.
In 2015, the Jeep brand was domestically produced, and then introduced models such as Free Light, Free Man, and Compass, which led to the rapid growth of GAC FCA’s sales. In 2017, GAC FCA reached a peak of 222,300 units per year, becoming the highest-selling company among the new joint venture brands at that time.
Since 2018, GAC FCA’s sales have begun to decline year after year. From 2018 to 2021, its sales were 124,000 units, 74,000 units, 41,000 units and 20,000 units, respectively. In the first half of 2022, GAC FCA’s cumulative sales were less than 2,000 units, a year-on-year plunge of 85%. As of September 30, 2022, GAC FCA’s total assets were 7.322 billion yuan, total liabilities were 8.113 billion yuan, and the asset-liability ratio reached 110.80%, and the assets were no longer enough to pay off all debts.
Image source: GAC FCA
The bankruptcy of GAC FCA is the result of a variety of internal and external factors.
In the face of fierce market competition, GAC FCA failed to launch new products that meet market demand in a timely manner. The Jeep brand launched few real new products between 2018 and 2021, resulting in an aging product line that could not meet consumer demand for new technologies and designs. In addition, frequent product quality problems and intensified conflicts with dealers have seriously damaged the brand’s reputation.
In addition, differences between shareholders and changes in the market environment have exacerbated GAC FCA’s predicament. The differences between the two sides in equity distribution and business strategies have weakened the foundation of cooperation. At the same time, with the rise of China’s own brands and the intensification of market competition, GAC FCA’s market share has been further squeezed.
The bankruptcy of GAC FCA has aroused widespread concern and deep reflection in the industry. On the one hand, it is seen as a typical representative of the gradual marginalization of joint venture car companies in the Chinese market. In recent years, with the rise of independent brands, the advantages of joint venture brands in the Chinese market have gradually weakened. The failure of GAC FCA is also a reminder to other joint venture car companies that they must pay more attention to product innovation and brand building to adapt to rapidly changing market demands.
The bankruptcy of GAC FCA is not only a failure case of joint venture car companies in the Chinese market, but also a profound lesson in the wave of change in the automotive industry. It warns all car companies, whether joint ventures or independents, that only by continuously innovating and improving product quality and brand value can they be invincible in the fierce market competition.