Great Wall of China revs up bid for Fiat
SPECULATION over the future of Fiat Chrysler went into overdrive yesterday after Chinese car maker Great Wall Motors revved up interest in buying all or parts of the Italian-American group.
Great Wall, which has a market value of about £14billion and is one of China’s biggest producers of sports utility vehicles (SUV) and Pick-up trucks, said there was an “intention to make the purchase”, without saying whether this amounts to a full-blown takeover.
Fiat Chrysler, which is a top 10 car maker worth more than £15billion, denied receiving an approach and was “fully committed” to its four-year business plan which runs to the end of next year.
Rumours of Chinese interest in Fiat Chrysler have been circulating for the past few days, with the main focus on its Jeep brand, widely considered to be its jewel in the crown. It also owns Alfa Romeo, Maserati and RAM trucks. It said: “Fiat Chrysler Automobiles has not been approached by Great Wall Motors in connection with the Jeep brand or any other matter relating to its business.”
Yupu Lin, of Warwick Business School, said buying Fiat Chrysler would boost Great Wall’s technological capacity and help to beef up its presence in the highend SUV market, but financing and gaining regulatory approval present potential stumbling blocks. Dr Lin said: “It is arguable if Great Wall has sufficient experience in running a global business such as Fiat Chrysler and solving the current operating problems which Fiat is encountering.
“If the deal were completed and approved, Jeep would enlarge its market share in China facilitated by the domestic sales channel of Great Wall. Meanwhile, Fiat would obtain capital to overcome its current financial difficulty and be able to focus on its product line transformation.” Fiat Chrysler has been seeking a partner or buyer to help it manage rising costs, comply with emissions regulations and develop technology for electric and self-driving cars. Volkswagen and General Motors have reportedly been sounded out without success.
China’s focus on the global car industry has seen another giant, Geely, buy Volvo, Lotus and London Taxi Company.