Last week, several Chinese automakers were reportedly interested in acquiring Fiat-Chrysler Automobiles (FCA). Three of the four auto brands that supposedly showed interest however, denied that they have any plans in buying the Italian-American car company any time soon. These included Dongfeng, Geely and more recently, Guangzhou Automobile Corp. (GAC).
Great Wall, on the other hand, appears to be keen in acquiring Jeep from FCA. In a report by Automotive News Europe, Great Wall president Wang Fengying wrote in an email to the online publication that they intend to buy Jeep and plans on communicating with FCA soon. Xu Hui, a spokesperson for the Chinese company, followed up on what Wang said and reiterated that they have shown an interest with Jeep but have not yet sent a formal offer or met with FCA's board.
“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 than Great Wall could do with its own brands,” said Xu.
Currently, Great Wall has an annual revenue of $14.76 billion. FCA, on the other hand, has a bigger annual revenue of $131 billion. In spite of this, Xu said that they are optimistic that they will be able to raise enough funds to make an acquisition possible. It is estimated that the Jeep brand itself is worth $20.6 billion which is still higher than what Great Wall generates annually.
“Great Wall has a strong track record in making good profits. We are also listed in Hong Kong and Shanghai. We can make use of our accumulated profits as well as our access to the capital market to make the deal happen,” added Xu.
In review, Chinse automakers have been buying other foreign auto brands as of late due to government pressure to acquire more foreign brands under the initiative 'China Outbound'.
SAIC bought British automaker MG and migrated all production to China. Geely acquired Swedish auto brand Volvo for 1.3 billion in 2010, as well as the London Taxi Company. More recently, Geely also bought 49% of Malaysian automaker Proton from DRB-HICOM. The deal also included 51% of British performance brand Lotus since DRB-HICOM also owned Lotus.
If FCA does agree to sell Jeep to Great Wall, it could be one of the biggest buyouts in automotive history.