Stellantis, the parent company of Jeep, said it had fully impaired the value of its investment in the joint venture in its results for the first half of 2022. It also said it would continue to provide service to Jeep customers in China.

Meanwhile, GAC, which approved the bankruptcy filing, said the joint venture had liabilities of almost 111 percent of its assets of 7.3 billion yuan (around 1 billion US dollars). The bankruptcy would not have a significant impact on GAC’s operations, the Chinese company said.

Stellantis terminated the venture with GAC in July, only months after it said it would raise its stake in the business to 75 percent from 50 percent.

In the following days, GAC criticized Stellantis and said it was “deeply shocked” by comments from the European automaker about the end of their joint venture in China.

Sales for the venture, which sold the Jeep Cherokee and Compass in China (they were subsequently exported to the Philippines in 2020), have been in sharp decline for the past four years. Volume fell by 50 percent in 2021 from the previous year to 20,396 vehicles.

For 2022, the JV sold fewer than 2,000 vehicles. In May, it reported selling only a single vehicle.

Foreign automakers as a group have been under growing pressure in China, where the market has shifted quickly to battery electric vehicles (BEVs) and domestic brands have been taking market share.

Foreign automakers saw their share of China’s auto market, now the world’s largest, drop by 5.5 percentage points last year, to 45.6 percent, according to the China Passenger Car Association.

The JV model, which China had insisted on as a condition of investment by foreign automakers, is under threat, said Chee-Kiang Lim, managing director China at Detroit-based consultancy Urban Science.

“The JV policy was originally designed to compel foreign brands to share their brands and technology with local Chinese (automakers) in exchange for access to China’s large, growing auto market,” he said.

Now that Chinese automakers are more “confident that they have closed the gaps with or even surpassed their foreign partners,” he said, “we have to expect more JVs to unwind in the coming years.”

Currently, Tesla is the only global automaker that was granted a waiver to produce cars in China without a joint venture.