In what is almost certainly going to be little more than a faint memory in the minds of devoted readers at AmericasJeepLovers.org, the potential relationship between Wang Fengying’s Great Wall Motors Co. and Sergio Marchionne’s Fiat Chrysler Automobiles has taken a turn for the less likely already.
It seems like years ago — no, wait, it seems like yesterday — that Great Wall Motors Co. publicly declared its viability as a suitor for FCA Jeep, the most important, highest-value, primary source of desirability within the FCA family. Jeep, you’ll recall, is likely worth substantially more on its own than the whole of FCA, Jeep included. This explains why it came as no surprise that Great Wall Motors or any other automaker would express an interest in purchasing Jeep from FCA. With huge global potential for a hugely popular brand that hasn’t yet tapped many open markets, Jeep has reach.
But does Great Wall even have the money? Would FCA even entertain the idea of selling off its most valuable component? And is there even any hope of negotiation?
Those were the questions yesterday. Today, Great Wall made clear that the company “had not made any progress so far” in acquiring the Jeep brand and hasn’t even spoken with FCA about the not-so-potential purchase.
With Jeep in the midst of major generational changeovers, U.S. sales have taken a dramatic downturn despite continued health in the SUV/crossover market in which Jeep should, theoretically, exert so much control. The second-generation Jeep Compass is replacing both the old Compass and the departing Patriot, and Jeep is determined to generate a greater share of the Compass’s sales outside the fleet network. The fast-approaching replacement of the JK-generation Jeep Wrangler also reduces demand as The Faithful await the possibility of a more alluring vehicle just around the corner. Jeep’s Cherokee, meanwhile, is aged and now facing strong competition from the Compass. This leaves the Grand Cherokee and Renegade, the two Jeeps which are not surprisingly faring the best in comparison with last year.
Nevertheless, Jeep sales are down 13 percent in the U.S. this year, a warning sign for any potential FCA suitor that considers the brand invincible. But the real reason would-be buyers of the Jeep brand, such as China’s Great Wall Motors, have such an interest in the seven-slat grille relates to the limited global exposure of the brand.
The U.S. market accounts for one-fifth of the global auto industry’s volume, yet Jeep only generates one-third of its sales outside of America. No wonder Great Wall is willing to publicly state its Jeep interest. Imagine how powerful Jeep could be if it sold vehicles in large numbers elsewhere.
Wanting Jeep, of course, doesn’t mean you can have Jeep.
[Image: Fiat Chrysler Automobiles]