A major Chinese auto manufacturer is considering a bid for Jeep – a brand which became famous during World War Two.
The Great Wall Motor company will submit a bid to Fiat Chrysler, who own the brand.
A foreign purchase of such an iconic brand could cause problems for President Donald Trump, especially if US jobs are moved off shore as a result.
China’s Great Wall intends to buy Fiat Chrysler’s Jeep brand which can link its history back to the iconic WWII four-wheel-drive vehicle made by Willys at the outbreak of the war
Trump has previously criticized the imbalance in the levels of trade between the Untied States and China.
Great Wall Motor ranks only as the seventh biggest Chinese auto company in terms of sales — 1.07 million in China and 17,400 abroad last year.
A spokeswoman for Great Wall Motors said: ‘There is an intention to make the purchase.’
The US car industry publication Automotive News reported earlier that Great Wall Motor president Wang Fengying had said in an email that her company intended to buy FCA’s Jeep brand.
FCA said in a statement that it ‘has not been approached by Great Wall (Motor) in connection with the Jeep brand or any other matter relating to its business.’ Great Wall’s spokeswoman did not confirm whether the companies had made any contact yet but she confirmed the intention to make an offer.
Bill Russo, managing director of Gao Feng Advisory Group, said he believes Great Wall Motor is interested in just buying Jeep rather than buying all of FCA and inheriting its sizeable liabilities.
Reports Chinese companies are eyeing a possible takeover drove up shares of Fiat Chrysler A
Great Wall is known for its sport-utility vehicles, which are popular in China, so a deal would be ‘quite complementary’ for the company, the analyst said.
China is the world’s biggest car market and sales of SUVs soared by 45 per cent last year, with nine million units sold, according to industry figures.
Fiat Chrysler sold 110,000 locally built cars in China in the first half of the year, in particular thanks to rising sales of Jeeps built by a joint venture with GAC Group.
With sales of its models ebbing in the United States, a Chinese acquisition could offer a lifeline to Fiat Chrysler, in particular for its Chrysler, Dodge and Fiat brands.
FCA’s shares have soared on the Milan stock exchanges on reports of a potential deal.
FCA CEO Sergio Marchionne spun off Ferrari in 2015 and could do likewise with Alfa Romeo and Maserati, so selling any of its other brands to a Chinese investor could fit in with that corporate strategy.
‘They could get a pretty good price for’ Jeep, Russo said.
Great Wall Motor would not be the first Chinese auto company to make a major acquisition abroad.
Sweden’s Volvo was acquired by China’s Geely in 2010 and has enjoyed strong sales growth since, with the Chinese market accounting for 20 per cent.
‘We are definitely going to take our intention to buy (FCA) seriously,’ Great Wall Motor’s spokeswoman said.
‘As for the plans for later stages, doing what on which day, this is an issue for the strategy of the top management level,’ she said.
Great Wall’s ‘interest in purchasing FCA highly fits our professional development path and strategy of globalisation’, the spokeswoman said.