China’s Great Wall Motors weighing bid for Fiat Chrysler’s Jeep unit
FCA chief Sergio Marchionne put out the "for sale" sign at the world's seventh-largest automaker earlier this year, noting that it can't compete globally without a tie-up to a bigger partner
BEIJING—Chinese SUV maker Great Wall Motors is considering making a bid to acquire Fiat Chrysler’s Jeep unit, two employees of the Chinese company said Aug. 21, in an ambitious new move for the country’s fast-growing domestic auto brands.
Great Wall has yet to make a formal announcement of its interest in Jeep but a possible acquisition would be in line with chairman Wang Jianjun’s goal, announced in February, of becoming the top specialty SUV producer by 2020.
Great Wall “has this intention,” said the public relations director for its Haval SUV brand, Zhao Lijia, when asked about a report by Automotive News that the Chinese automaker wants to buy Jeep. An employee of the press office for the company headquarters, who would give only his surname, Zhang, said, “Yes, we are interested in Jeep.”
Zhao and Zhang said they had no other details when asked about a possible price. Zhao said it may take some time to assemble a formal bid.
Fiat Chrysler CEO Sergio Marchionne has said the company is for sale and cannot compete globally without a tie-up to a bigger partner due to the high costs of developing and marketing vehicles.
Marchionne said in April that Jeep and Chrysler’s Ram truck brand are strong enough to stand alone as separate businesses.
Chinese companies in industries from computers to insurance to autos are in the midst of a global buying spree, acquiring brands and technology to strengthen their competitive position at home and speed their development.
Great Wall is part of a group of new but ambitious independent Chinese automakers that have grown up alongside state-owned giants such as Shanghai Automotive Industries.
If it goes ahead with a Jeep bid, Great Wall could become the second Chinese automaker, after Geely Holding Group, to expand onto the global stage by acquiring an established, older foreign brand.
Geely bought Volvo Cars from Ford Motor Co. in 2010 and has launched a third brand, Lynk & Co., as a partnership between Volvo and Geely’s Chinese brand. In June, Geely bought a 49.9 per cent stake in Malaysian automaker Proton and a controlling interest in British sports car maker Lotus.
Great Wall sold just under 1.1 million SUVs last year, behind Jeep’s 1.4 million vehicles. Its revenue of 98.6 billion yuan ($14.4 billion) was a fraction of FCA’s global total of $118 billion (111 billion euros), but its $1.5 billion profit was almost equal to the Italian-U.S. automaker’s $1.8 billion.
Great Wall emerged from a collective business founded in the 1980s to repair and customize vehicles. Wei, then 26, took control in 1990 and shifted into auto manufacturing. The company launched its first sedan in 1993 but narrowed its focus a decade ago to SUVs.
Wei said in February that the company’s “globalization strategy” included improving technology to meet U.S. safety standards. But he gave no indication when Haval might export to the United States or major European markets such as Germany.
—Associated Press researcher Fu Ting contributed to this report