China Buyout Watch: Let The Chrysler Speculations Begin, Again

Bertel Schmitt
by Bertel Schmitt
china buyout watch let the chrysler speculations begin again

It got a little quiet recently about Chinese automakers ogling American automakers-in-distress. London’s Financial Times (sub) decided it’s time to rekindle the flames. “China is the world’s second-largest car market,” the pink sheet writes today, “and rumors swirl ceaselessly about a Chinese carmaker buying Chrysler or General Motors. It is a remarkable transformation and one that cannot be halted, even by the global economic recession.” After waxing prose about the end of the “stratospheric double-digit growth of recent years,” and snidely remarking that “industry analysts are still expecting high single-digit growth for 2008 and possibly 2009 as well. Much of the rest of the global car industry would be happy to see such numbers,” the FT gets right to the point:

“No one expects the Chinese government to step in with a Washington-style bail-out, but last month Chery announced that it had arranged RMB10b ($1.46b) in financing from China’s Export Import Bank to fund overseas activities, and then immediately said it was calling off a small-car partnership with Chrysler – fueling speculation that Chery’s real intent was to buy the troubled US carmaker.”

Of course, the FT quickly pours a little water on their own fire – just enough to work up some steam – by trotting out “Yale Zhang, Shanghai-based analyst at CSM, the automotive consultancy,” who “thinks that is unlikely.”

So then, if it’s unlikely, and if there is no new information, why print the story at all? And why did Gasgoo, which is 60 percent owned by Chery, choose to reprint the story without a single comment? One explanation is that it’s a slow news day. Another explanation:

While Chrysler was begging for bailout bucks, even Autobloggreen had to concede: “Not a good combo: Chery, Chrysler and the Congressional bailout.” But now, as DC is dragging out forking over the money, maybe someone thinks it’s opportune to point out that there might still be another suitor lurking in China. Or maybe there is.

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  • Timd38 Timd38 on Jan 02, 2009

    Chrysler wants to source everything from China and India, so it is only appropriate that they also own them.

  • Geo. Levecque Geo. Levecque on Jan 02, 2009

    China would be out of there "Mind" by buying Chrysler, just to get there foot in the American door, imho!

  • Tassos Chinese owned Vollvo-Geely must have the best PR department of all automakers. A TINY maker with only 0.5-0.8% market share in the US, it is in the news every day.I have lost count how many different models Volvo has, and it is shocking how FEW of each miserable one it sells in the US market.Approximately, it sells as many units (TOTAL) as is the total number of loser models it offers.
  • ToolGuy Seems pretty reasonable to me. (Sorry)
  • Luke42 When I moved from Virginia to Illinois, the lack of vehicle safety inspections was a big deal to me. I thought it would be a big change.However, nobody drives around in an unsafe car when they have the money to get their car fixed and driving safely.Also, Virginia's inspection regimine only meant that a car was safe to drive one day a year.Having lived with and without automotive safety inspections, my confusion is that they don't really matter that much.What does matter is preventing poverty in your state, and Illinois' generally pro-union political climate does more for automotive safety (by ensuring fair wages for tradespeople) than ticketing poor people for not having enough money to maintain their cars.
  • ToolGuy When you are pulled over for speeding, whether you are given a ticket or not should depend on how attractive you are.Source: My sister 😉
  • Kcflyer What Toyota needs is a true full size body on frame suv to compete with the Expedition and Suburban and their badge engineered brethren. The new sequoia and LX are too compromised in capacity by their off road capabilities that most buyers will never use.