Chinese company Great Wall Motor wants to take over Jeep
The Chinese company Great Wall Motor wants to take over the American brand Jeep which is part of the Italo-American car maker Fiat Chrysler. There are no official bids but things seem serious. A takeover might not be easy because American and European market supervisors could be obstructive. Other European car brands such as Jaguar, Volvo, Land Rover, Peugeot and Citroen are already (partially) in Chinese hands.
Marchionne wants to merge
A take-over of Jeep and perhaps even the whole Fiat Chrysler group doesn’t come as a surprise. Fiat CEO, Sergio Marchionne, earlier made clear to be interested in merging with another car brand. “This could reduce costs and in the end the customer would benefit of a better and more fuel efficient car”, he said. American manufacturers such as Ford or General motor were not interested in a cooperation. As a matter of fact Chinese players do show interest. Automotive News reported earlier this week that another Chinese car maker, Guangzhou, made an offer (which was too low) and also other Chinese brands might be interested.
Small company shows interest for big group
The new bid isn’t official yet but the share price on the stock market of both Great Wall Motor and Fiat Chrysler is rising. According to merchant bank Morgan Stanley Jeep, as a part of the group, would be worth more than the whole Fiat Chrysler group. The Chinese group might also show interest to buy out the whole business. Today Great Wall Motor is the biggest producer of SUV cars in China and the car maker wants to become the biggest SUV and pick-up brand in the world. The take-over would give Great Wall Motor (GWM) access to foreign markets such as the US or even Europe. However, today GWM is much smaller in terms of volume (1,25 million cars last year) compared to Fiat Chrysler, which is the sixth biggest car manufacturer in the world.
Market supervisors could be obstructive
Even when both parties should come to an agreement, it is uncertain whether the takeover would be approved by the market supervisors. The European Commission and the Trump government want to protect their own companies as Chinese players tend to buy knowledge and technology. On the other hand it is very difficult for European and American companies to get access to the Chinese market. Even in China this take-over won’t be a walk in the park because China wants to become the biggest player in terms of electric and hydrogen powered vehicles. Marchionne has doubts whether the electric car is environmental friendly and profitable.