A worker uses his phone while walking past the venue of this year's Beijing Auto Show on the eve of the event at the China International Exhibition Center in Beijing on April 23, 2026. Photo: VCG

Stellantis and its longtime Chinese partner Dongfeng have signed a $1.2 billion deal to produce Peugeot and Jeep vehicles in China, the automakers said on Friday, and have hinted at future expanded cooperation, the Dutch-based automaker announced on its website on Friday.

The deal equates to a combined investment of more than 8 billion yuan ($1.18 billion), or about 1 billion euros ($1.2 billion), with Stellantis expected to contribute about 130 million euros.

Aimed at supplying both the Chinese market and exports, the agreement forms part of Stellantis' new long-term strategy, which Chief Executive Antonio Filosa is ⁠due to unveil on May 21.

The move by Stellantis followed other dual-way engagement between Chinese and European automakers, and is expected to inject new growth impetus to China-EU cooperation in the automotive sector, an industry insider said.

Earlier this week, the Bloomberg reported that Chinese electric maker BYD is negotiating with Stellantis and other European car makers to take over underused factories in the region.

Cooperation between Chinese and European automakers have been gaining pace in recent years.

In April, in meetings with major European automotive industry associations, officials from China's Ministry of Commerce (MOFCOM) and the Ministry of Industry and Information Technology (MIIT) have called on the sector to play a constructive role in advancing China-Europe cooperation.

In November 2025, German carmaker Volkswagen Group announced the opening of its first full test workshop, Volkswagen Group China Technology Co, in Hefei, East China's Anhui Province, with about 100,000 square meters of space and more than 100 advanced laboratories integrating software-hardware testing, battery and powertrain validation, and full-platform verification.

The opening signals the final expansion stage, and the new facilities significantly expand the group's local R&D strengths, the company said in a press release.

Luke Hu, co-founder of Electroder, an industry insider familiar with the landscape of the Chinese and German auto industries, told the Global Times on Friday that deeper engagement with Chinese automakers by European counterparts will help them tap opportunities in China's openness, participate in the Chinese market and competition, and leverage China's value chain advantage.

Developing cars in China for the global market would be a strategy some European automakers will pursue, Hu said.

China welcomes European automakers to continue investing in China and collaborating with Chinese partners to promote the auto industry's green, intelligent transition, an official with China's MOFCOM said in December last year, noting that the Chinese and European auto industries are deeply integrated, the Xinhua News Agency reported.