Chinese Company Great Wall Motors Makes a Move on Jeep

China's Great Wall Motor Company wants to become a dominant force in the global automotive market. The company hinted recently at wanting to buy Jeep -- without the rest of its parent company, Fiat Chrysler Automotive.

Chinese Company Great Wall Motors Makes a Move on Jeep
The 2017 Wrangler Unlimited Jeep

A Chinese sport-utility brand has ambitious plans to buy Jeep from Chrysler Fiat Automotive. The Great Wall Motor Company began as an SUV and truck company but has grown to include smaller cars too. A dominant force in China it is ready to expand to other markets like the United States. According to a report from Automotive News, Great Wall has been observing Jeep for a while and is "deeply interested" in purchasing the iconic brand. A move that would make them leaders in the SUV industry.

President of Great Wall, Wang Fengying, claimed the company has reached out to Jeep. However, this has not been confirmed. Fortune magazine listed Fengying as the seventh most powerful woman in Asia. A statement from a company spokesman said, “We are deeply interested in the Jeep brand and have paid close attention to it for a long time...Our strategic goal is to become the world’s largest SUV maker. Acquiring Jeep, a global SUV brand would enable us to achieve our goal sooner and better.”

Great Wall Motors

Great Wall Motor's Coolbear SUV.  Source: Wikipedia

Jeep Without Fiat?

Fiat Chrysler Automotive (FCA) CEO, Sergio Marchionne has previously indicated the company is open to merging. However, the recent attempts to do this have been focused on the company as a whole rather than an individual brand. FCA has been in talks with both General Motors and Volkswagon but neither deal could get over the line. FCA tried to downplay rumors of the possible sale saying in a statement, that it "had not been approached by Great Wall relating to Jeep or any matter relating to its business", and adding it was "fully committed" to its long-term business plan.

Jeep grew 13.2 percent in 2016 and does more than 1 million sales in the United States annually. It currently produces five models and their variants. The New Wrangler and a pickup-truck version are coming soon. Great Wall currently has three SUV options, one pickup, and two cars in its product lineup. It is likely to be difficult for Great Wall to get just the Jeep brand away from FCA who would see it as its most valuable asset. But the potential for Great Wall to buy the whole company just to access Jeep isn’t unheard of. In the 1980’s Chrysler purchased all of American Motors mainly to acquire Jeep. FCA shares, rose 10pc in the last week on the back of the deal.

FCA shares rose 10 percent in the last week on the back of the deal rumors. FCA is currently the world's 8th largest carmaker, it has a total company value of approximately €16.4 billion. Professor David Bailey, a car industry analyst at Aston University, said: "Great Wall is very keen to get into the SUV products of FCA. In its home market, about 80pc of Great Wall's sales are SUVs and it is under pressure to deliver new models against serious competition - Jeep could be a way of doing that and would certainly lend it a certain cachet having the Jeep brand."

If Great Wall does succeed in purchasing Jeep, it will be just another deal in a line of Chinese Companies acquiring global car brands. Billionaire Li Shufu’s Geely has recently bought Volvo, Lotus and London Taxi Company.

 

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