Like many elder Chinese millennials, Alice Yu was deeply saddened last week when she heard the joint venture that made Jeeps in China had declared bankruptcy.

The 40-something recalled her then-boyfriend giving her an unforgettable gift in the early 2010s: an imported Jeep Grand Cherokee costing more than 400,000 yuan (US$55,700).

At the time, Yu was an up-and-coming media manager living in Shenzhen, and the luxurious SUV seemed to symbolise the “American dream” of freedom and prosperity that her generation aspired to.

But that now feels like another age. The US brand has since fallen badly behind the times in China, leading to plunging sales, spiralling debts and a historic bankruptcy that will send shivers across the global auto industry.

On July 8, Stellantis and Guangzhou Automobile Group (GAC) announced their Chinese joint venture GAC Fiat Chrysler Automobiles had officially declared bankruptcy – a first for a Sino-foreign joint venture in China’s car market.

Stellantis is a giant multinational that owns brands including Peugeot, Fiat, Chrysler and Maserati. But in China it was long synonymous with Jeep – an iconic brand whose history in the country dates back to 1949, when Mao Zedong was pictured saluting Chinese troops from a US Army Willys Jeep.