China’s Great Wall wants to buy American icon, Jeep

They are coming… 

Chinese speciality SUV maker, Great Wall Motors aka GWM, has confirmed that it is very interested to make a bid for Fiat Chrysler’s Jeep brand, which would be a very ambitious step onto the global brand stage for one of China’s homegrown and rapidly expanding automakers. The news is very much in line with GWM’s Chairman Wang Jianjun’s  goal of becoming the world’s largest specialist SUV producer before 2020, just two and a half short years away.

In various reports carried online, two GWM employees are credited with confirming the story; Zhao Lijia, the public relations director for the Haval SUV brand said that GWM “has this intention” when asked about the report; in another announcement equally lacking any eloquence, another employee from the press office, who was only identified by the name Zhang, is quoted as saying: “Yes, we are interested in Jeep”.

It is no secret that the Jeep brand was up for sale after Sergio Marchionne, Fiat Chrysler CEO, said Jeep would have trouble competing globally without a tie-up with a bigger partner because of the high cost of developing new vehicles. Chrysler also owns Dodge Ram and after the earlier announcement by Sergio, it was presumed that both Ram and Jeep may be spun off from the main group, in much the same way that Ferrari was in 2015.

Although Fiat Chrysler Automobiles (FCA) has not had a formal offer yet, and these bids do take a little while to put together, most industry analysts are expecting GWM to follow in the footsteps of Geely and Dong Feng, and start to acquire foreign brands. Chinese companies have been spending big to acquire the technology and know-how to strengthen competitiveness both at home and abroad.

If this move goes ahead, then GWM, which grew up just to the south of Beijing, will be the third to do so. SAIC sort of got the ball rolling when it bought bankrupt British brand MG back in 2005. This was followed by Dong Feng, with its purchase of Peugeot parent PSA, and of course Geely have been actively buying a number of brands, including the recent purchase of Proton and Lotus. GWM is a relative newcomer to making cars, having built its first sedan as recently as 1993 and last year sold just over 1.1 million units – not a lot when you consider that Jeep sold 1.4 million in the same period. Last year, the company turned over some US$14 billion, which again does not favour comparably to the US$118 billion that FCA managed to rake in. However, GWM managed to make a profit of US$1.5 billion on that turnover whilst FCA only managed to profit US$1.8billion.

We expect that there will be a number of hurdles to jump prior to the purchase going through, some of which will be the emotional response of allowing such an iconic American brand being purchased by a Chinese upstart. But some of the objections may of course centre on the work that the Jeep brand does for the American military, and that may be too sensitive.

We suppose though that if GWM cannot buy Jeep, it may just start to copy it like they did with the Landwind, which of course was an Evoque clone.

images: South China Morning Post;

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