FCA denies Great Wall interest in Jeep
BY ROBBIE WALLIS | 22nd Aug 2017
In a statement released yesterday, FCA said it “has not been approached by Great Wall Motors in connection with the Jeep brand or any other matter relating to its business", and that it was fully committed to its Start 2014-18 business plan.
The business plan dictates that, as a group, FCA would strive for a growth in sales from 4.4 million units a year up to nearly 7.0m, with Jeep being the prime mover, growing from 700,000 units in the 2013 financial year to 1.9m by 2018.
In that period, FCA also predicted Jeep to overtake Fiat as the best-selling brand under the FCA umbrella, with Asia Pacific to be the biggest area of growth.
To the end of 2016, Jeep recorded 1.4m global sales.
However, a Chinese publication has reported that Great Wall has reached out to FCA to see if a deal regarding Jeep could be negotiated.
According to Automotive News China, Great Wall president Wang Fengying told the publication in an email that the company intends to buy Jeep and is “connecting with FCA” to start negotiations.
Great Wall spokesperson Xu Hui added that the company has indirectly expressed interest in Jeep, but has not yet met with FCA’s board or put forward a formal offer.
“We are deeply interested in the Jeep brand and have paid close attention to it for a long time,” Hui told Automotive News China.
“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 doing it in-house).” Great Wall currently sells Haval-branded SUVs Down Under, but the fledgeling marque has struggled to make an impression on the Australian market since launching in October 2015, with 406 total sales recorded so far in 2017 across four model lines.
Morgan Stanley analyst Adam Jones estimated that a purchase of Jeep would set Great Wall back around $US33.5 billion ($A42.2b), a figure greater than the $US32b ($A40b) estimated value of FCA overall.
Mr Hui said that despite Great Wall having smaller annual revenue than FCA, an acquisition could occur though the use of accumulated profits and access to the capital market.
FCA CEO Sergio Marchionne told the Detroit Free Press in April that it was not out of the question for Jeep to be spun off into its own separate operation, as was done to Ferrari last year.
As part of its global expansion, Jeep has planned a number of new or updated models to be rolled out in coming years, including the all-new Compass, updated Renegade, hot Grand Cherokee Trackhawk and new Wrangler, while the pick-up, Wagoneer and Grand Wagoneer are expected to be revived in the future.
