Chinese car firm could buy Jeep

China’s Great Wall Motors has confirmed its interest in bidding for all or part of Jeep maker Fiat-Chrysler Automobiles.

There has been speculation over Chinese interest in Fiat-Chrysler Automobiles since Automotive News reported last week that an unidentified “well-known Chinese automaker” made an offer earlier this month, triggering a jump in Fiat-Chrysler Automobiles’s Milan-listed shares.

“With respect to this case, we currently have an intention to acquire. We are interested in Fiat-Chrysler Automobiles,” a Great Wall Motors spokesman said.

Fiat-Chrysler Automobiles chief executive Sergio Marchionne is seeking a partner or buyer for the world’s seventh-largest automaker to help it manage rising costs, comply with emissions regulations and develop technology for electric and self-driving cars. In a statement, Fiat Chrysler said it had not been approached by Great Wall Motors, and was busy with implementing its current five-year business plan.

At a time when Beijing’s attitude to outbound deals has cooled, if Great Wall bought Fiat-Chrysler Automobiles , which has a market value of almost $20bn (€17bn), it would be by far China’s largest overseas motor industry deal — and possibly one of its largest ever overseas purchases — dwarfing Geely’s 2010 $1.5bn acquisition of Volvo cars.

Fiat-Chrysler Automobiles is also larger than Great Wall, which has a market value of closer to $16bn.

“Our strategic goal is to become the world’s largest SUV maker,” Automotive News quoted the spokesman as saying. “Acquiring Jeep, a global SUV brand, would enable us to achieve our goal sooner and better (than on our own).”

Mr Marchionne told analysts last month that a new five-year strategy could include asset sales.

While he acknowledged that Jeep, Ram, Maserati and Alfa Romeo could exist on their own, he appeared to pour cold water on the idea any of them would be sold. Jeep SUVs and Ram trucks have become a major profit engine and a driver for Fiat’s north American operations.

Morgan Stanley estimated Jeep’s enterprise value at €23bn — nearly 150% of the whole of Fiat-Chrysler Automobiles’s market value.

Reuters