Last week, we reported on this platform how cash-rich Chinese companies are looking at profitable foreign acquisitions to ensure fast track entry into global markets under the country’s ‘China Outbound’ policy. The scheme includes purchasing prized global companies including car making entities.
Fiat Chrysler Automobiles was in the news recently after it declined an acquisition offer from a Chinese brand. But this event has not dampened the drive by other Chinese brands for the prized brands like Chrysler, Dodge, Jeep, Ram and Fiat.
Hebei, China-based cash-rich Great Wall has come forward as a promising suitor for FCA’s Jeep brand. Great Wall President Wang Fengying said that her company is “connecting with FCA” to start the negotiation process. FCA, however, has denied that has been approached by Great Wall. Great Wall’s offer, if accepted, would mean FCA’s most valuable brand would go to the Chinese.
Great Wall generates $14.7 billion in annual revenue compared to FCA’s $131 billion. Great Wall says it is confident that it could raise the funds to buy Jeep if the deal goes ahead.
Market watchers think Jeep might be worth more on its own that the entirety of FCA with Jeep included. This aspect complicates the matter for any potential buyer that owns FCA franchise dealerships, and for FCA, for which Jeep is an attractor for selling the company as a whole. Great Wall is China’s largest SUV maker and the company has been following Jeep, and sees it as a key business strategy to achieving its goal of becoming “the world’s largest SUV maker.” Great Wall already has research and development facilities in Detroit and Los Angeles. The Great Wall is also considering building a factory in the US rather than in Mexico.