Great Wall, the seventh-largest automaker in China, has reached out to Fiat Chrysler Automobiles (FCA) with a keen interest in acquiring the Jeep brand, according to a report by Automotive News.
In 2016, Great Wall’s two brands—Great Wall and Haval—sold 1.1 million vehicles, predominantly SUVs. In comparison, Jeep sold 1.41 million units that same year. If a deal is successfully negotiated, Great Wall could establish itself as a significant player on the global automotive stage and finally realize its long-held aspiration of penetrating the U.S. market, a goal it has pursued since 2013.
While this potential acquisition could be a significant opportunity for Great Wall, it may pose challenges for FCA. Jeep is widely recognized as one of the most valuable assets within the FCA portfolio, consistently generating substantial sales, especially in the SUV segment. The strength of the Jeep and Ram brands is crucial for many Dodge and Chrysler dealerships across the U.S., and the loss of either could significantly impact these dealerships.
But would FCA actually part with such a valuable brand? In April, CEO Sergio Marchionne indicated a level of openness to this possibility. He has previously considered separating Jeep into its own distinct entity, similar to the spin-off that occurred with Ferrari in 2015. If the right price were on the table, selling Jeep might not be out of the question.
Determining the right price is key, however. Great Wall is substantially smaller than FCA, generating annual revenues of $14.76 billion compared to FCA’s $131 billion. Despite its limited presence in the global automotive sector, Great Wall appears optimistic about its ability to finance a purchase of a brand that likely exceeds its revenue by more than double.
Is Jeep better off under FCA’s stewardship, or would it thrive under new ownership? Share your thoughts in the comments below..
