Stellantis’ growth tools: Chinese tech and Saudi production

• Aiming for 8% Gulf market share
• Saudi production base planned
• Leapmotor to launch in 2027

Carmaker Stellantis is pressing ahead with plans to build vehicles in Saudi Arabia and wants to more than treble its market share in the Gulf.

The company is betting that Chinese technology and local manufacturing can help it to regain ground in one of the world’s fastest-changing automotive markets.

The world’s fourth-largest automaker said on June 30 that proposed manufacturing plants in Saudi Arabia and South Africa remained “active” and were still moving forward, despite a difficult global environment for carmakers and growing competition from Chinese rivals.

The multinational was formed in 2021 through a merger of Peugeot in France and Fiat Chrysler of Italy and the US. It is targeting a rise in market share in GCC countries to between 7 and 8 percent, up from about 2 percent today, said Samir Cherfan, Stellantis’ chief operating officer for the Middle East and Africa.

In November 2025 Stellantis, whose brands include Jeep, Peugeot, Fiat and Citroen, signed a memorandum of understanding with Saudi Arabia’s Ministry of Investment, the National Industrial Development Center and Petromin Corporation, to explore establishing a joint vehicle manufacturing plant in the kingdom.

Slaven Klarin, managing director for the Middle East, said the company is assessing which brands and models would be suitable for local production, adding any investment would depend on whether production volumes justify the return on investment and whether vehicles could be exported beyond the region.

Chinese manufacturers are rapidly gaining market share across the Middle East, reshaping the competitive landscape.

“Two or three years back we had zero Chinese, now we are 11 percent average (market share for the region) and peak at 40 percent in Egypt,” said Cherfan.

The shift has accelerated in recent months. In May, amid disruption caused by the US-Israeli war with Iran, Klaren said sales for Japanese market leaders fell sharply, with Toyota and Nissan both declining by more than 40 percent, while China’s Chery Group recorded growth of 8 percent.

To respond, Stellantis plans to increase sourcing from Asia and local suppliers. Cherfan said locally and Asian-sourced vehicles could account for 90 percent of production by 2030, up from more than a quarter today.

The company is also increasingly looking to Chinese technology to improve competitiveness.

“If you take Chinese technology and competitiveness on the brand equity of Peugeot or Jeep, we are quite confident that we can significantly improve our business,” Cherfan said.

He argued that manufacturing costs in Morocco are already comparable with China, while benefiting from lower logistics costs and favourable trade agreements.

“We produce at Chinese cost in the north of the region with very competitive products,” he said.

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In July 2025 Stellantis expanded its manufacturing plant in Kenitra, Morocco, with a €1.2 billion ($1.4 billion) investment, aimed at doubling production capacity and raising local sourcing to 75 percent by 2030. And in May this year it opened its first vehicle dismantling centre in the Middle East and Africa, also in Morocco, in the port city of Casablanca.

The automaker is also preparing to launch Chinese electric vehicle brand Leapmotor in the region in early 2027 after delaying its introduction to conduct extensive hot-weather testing.

Klaren acknowledged the company is late to the market but said launching too early would have risked damaging the brand: “We want to make sure that the launch of Leapmotor is not a failed launch.”