In the week that’s elapsed since initial reports surfaced of a Chinese automaker planning a takeover of Fiat Chrysler Automobiles, Geely, Dongfeng, and Guangzhou Automobile Group have all taken themselves out of the running.
Automotive News now reports, however, that the seventh-largest automaker in China, Great Wall Motors Company, has a keen interest in FCA, which has long courted unwilling suitors.
There’s one outstanding issue. Great Wall Motors Co. is open about its desire to acquire Jeep as part of a mission “to become the world’s largest SUV maker,” but Great Wall doesn’t want FCA’s other, far less valuable entities.
Through its Haval brand, China’s Great Wall already greatly prioritizes SUVs. Of the 1.1 million vehicles Great Wall Motors sold in 2016, 85 percent were utility vehicles.
It’s not surprising that Great Wall would have a desire to acquire Jeep without the Chrysler, Dodge, Fiat, and Ram divisions clinging to the a seven-slat grille. According to recent Morgan Stanley reports, Jeep is worth roughly $33.5 billion. FCA, including Jeep, is worth $32 billion.
You do the math.
Because of Jeep’s current successes and huge global potential, Great Wall Motors Co. is surely not the only company that would happily take Jeep off FCA’s hands. Great Wall may nevertheless be the company that is most transparent about its interest in one of America’s most storied brands.
Great Wall Motors’ president, Wang Fengying, spoke candidly via email with Automotive News about her company’s intention to pursue a purchase of FCA’s Jeep brand, which accounted last year for 37 percent of FCA’s U.S. sales and 30 percent of the automaker’s 4.7 million global sales. Great Wall spokesperson Xu Hui doubled down.
“We are deeply interested in the Jeep brand,” Hui said. Can Great Wall even afford to buy Jeep? “We can make use of our accumulated profits as well as our access to the capital market to make the deal happen,” Hui tells Autmotive News.
Great Wall has, of course, had plans in the past that did not pan out. Wang Fengying said nearly a decade ago that Great Wall would be selling vehicles in the United States in 2013. It’s now 2017. Look around. See any Great Wall Motors Co. dealers? No.
Furthermore, standing in Great Wall’s way will be numerous other automakers which — if Jeep truly is available as a standalone, isolated, one-off sale — would be more than happy to take the SUV brand off FCA’s hands. Whether FCA has the desire to do so on financial terms is one factor that has likely already been considered. Whether FCA has the will to extricate Jeep from FCA’s tentacles is another major wrench in the works.
Weng Fengying isn’t the only automotive boss with heady goals. Fengying wants Jeep so Great Wall can be the world’s largest SUV maker. FCA’s Sergio Marchionne, meanwhile, believes Jeep is the one brand that could claim 20 percent of the global auto market, more than 12 times its current share.
[Image: © 2016 Timothy Cain/The Truth About Cars, FCA]