The existing studies on the cause of the international joint ventures’ successes and failures mainly take views from the stand point of the foreign multinational enterprise partners. This study approaches from the perspective of the Chinese partner, describes the initial conditions and main activities in the alliance process of Guangzhou Peugeot, and tries to analyze how the business and partnership of the company changed with time, what were the main factors that led the company to the failure, and how the failure experience later affected the development of the Guangzhou City’s passenger car industry.