GAC Motor Co. and FCA Group are loaning 1 billion yuan ($141 million) to help their joint venture navigate production disruptions and sharply lower vehicle deliveries in the wake of the coronavirus outbreak.
The two automakers will each contribute half of a one-year loan to GAC Fiat Automobiles, according to GAC’s filings on the Shanghai stock exchange, where the state-owned Chinese automaker is listed.
The loan will be offered at the loan prime rate announced by China’s central bank on the day when it is made, according to the filings. The loan prime rate is the most preferential interest rate major Chinese banks charge borrowers.
Largely because of travel bans and other restrictions in place to help contain the virus spread, GAC Fiat didn’t restart production until Feb. 17 after the two-week-long Chinese New Year holiday ended Feb. 9.
With the company’s assembly plants operating at partial capacity and most dealerships closed, the joint venture delivered only 316 vehicles in February, a drop of 93 percent from a year earlier.
In the first two months, the joint venture’s sales fell 83 percent to 2,380.
GAC FCA primarily builds four Jeep models -- the Cherokee, Renegade, Compass and Grand Commander in the central China city of Changsha and south China city of Guangzhou.
With a narrow product lineup, the company’s annual deliveries slipped 41 percent to 73,907 in 2019, according to figures released by GAC.