(Yicai) Sept. 20 -- The administrator for GAC Fiat Chrysler Automobiles, a bankrupt joint venture carmaker in China, has failed to auction off its plant in Changsha for the third time, despite having lowered the starting price.

The latest public auction started earlier this month, with a starting price of CNY1.2 billion (USD170.3 million). That was 20 percent lower than at the second auction in August and 36 percent down on the first auction in July.

GAC FCA was set up in 2010 as a 50:50 enterprise between Gaungzhou-based GAC Group and Fiat Chrysler Automobiles. It has production bases in Guangzhou and Changsha, with the latter receiving CNY10 billion (USD1.4 billion) of investment. The plant has stamping, welding, spraying, and assembly lines.

Fiat Chrysler is now part of Stellantis, and in July 2022, the Netherlands-based auto giant announced that because of a lack of progress in its efforts to acquire a majority stake in GAC FCA, it would end its role in the joint venture. 

GAC FCA subsequently entered bankruptcy proceedings, after which its Guangzhou plant was taken over by GAC and converted to produce Aion vehicles, GAC's new energy brand. The Changsha plant was taken over by Beijing Yingke Law Firm, a local court-appointed bankruptcy administrator, and the proceeds from the liquidation of its assets were to be used to repay creditors.

Analysts put the failure to auction off the plant down to China’s auto industry being mired in a price war since last year. With profits under pressure, potential buyers are paying more attention to cost control.

Another problem is that the plant’s production line is mainly for fuel-powered cars, which are being left behind in the shift to new energy vehicles, according to the analysts. Converting it to turn out NEVs would require major investment, making it less appealing to buyers.

Editors: Dou Shicong, Tom Litting