China’s Great Wall sets sights on Jeep acquisition
Deal would leave less-popular Fiat-Chrysler brands in limbo
The potential sale of Jeep to a Chinese automaker is sure to raise political questions and will present a challenge to President Trump’s “America First” mantra.
A Chinese automaker is “deeply interested” in buying Jeep, an iconic American brand, from Fiat Chrysler Automobiles in a move that likely would face political opposition in the U.S. and create angst among workers.
Great Wall Motor told trade publication Automotive News it has “indirectly expressed interest” in acquiring the brand known for its off-road vehicles.
The acknowledgment comes amid speculation the brands once held by Chrysler as one of the Detroit Three automakers could end up with Chinese owners less than a decade after the company was bailed out by U.S. taxpayers. It could also stir criticism over the U.S. economic relationship with China amid concerns about the balance of power in manufacturing and trade.
But Fiat Chrysler has been searching for a partner or buyer to enhance its chances of navigating a fiercely competitive global automotive industry in which major investments are required to meet fuel economy standards and develop self-driving vehicles.
A deal for Jeep would leave the future of several other Fiat Chrysler brands in limbo. While it would retain its popular, profitable Ram truck line, it also would have the far-less-lucrative Dodge and Chrysler lineups.
“We are not wholly surprised that Great Wall is targeting what is arguably the strongest brand in (Fiat Chrysler’s) portfolio with little interest for the ‘other stuff,’ ” Evercore ISI analyst Arndt Ellinghorst said Monday in a note to investors.
Sanford Bernstein auto analyst Robin Zhu said a deal for Jeep alone would be tough to execute in the current political environment and could make the rest of the company “unsellable.”
Still, a possible Jeep acquisition would be in line with Great Wall chairman Wang Jianjun’s goal, announced in February, of becoming the top specialty SUV producer by 2020. Great Wall did not respond to a USA TODAY request seeking comment. Fiat Chrysler said no discussions have occurred with Great Wall and it’s “fully committed” to carrying out a plan to deliver new products and profitability through 2018.
Nevertheless, Fiat Chrysler CEO Sergio Marchionne said this year the Jeep brand could be spun off into a standalone company. Marchionne has been signaling for more than two years that he is interested in discussions with other automakers about a sale of the company, partial sale or partnership of some kind.
The potential sale of Jeep to a Chinese automaker is sure to raise political questions and will present a challenge to President Trump’s “America First” mantra.
Snavely and Lawrence reported from Detroit, Bomey from McLean, Va.