Fiat Chrysler Alleged to Have Multiple Chinese Suitors

Matt Posky
by Matt Posky

Fiat Chrysler Automobiles CEO Sergio Marchionne has been hoping to sell the company to the right kind of buyer for a while now. But, with no serious contenders, FCA has been forced to trudge onward into the future without a bonafide suitor.

That’s rumored to have changed, as numerous sources are claiming Chinese automakers have taken an interest in the Italian-American company. However, whether these are potential one-night stands or a serious courtship remains unknown. Marchionne has previously specified he only wants to see FCA enter into the warm embrace of an established automaker and, while China has them, some would be better partners than others.

As to which foreign automakers, Automotive News claims numerous sources identifying executives from Dongfeng Motor Corp., Great Wall Motor Co., Zhejiang Geely Holding Group, and FCA’s current joint venture partner in China, Guangzhou Automobile Group, as all taking an active interest.

While some of you prepare your typing digits to express outrage that quintessentially — almost hyperbolically — American brands like Jeep or Dodge could never be owned by a Chinese entity, don’t forget that Chrysler used to be in bed with Germany’s Daimler and is currently an Italian-controlled multinational corporation incorporated within the Netherlands. FCA could definitely end up married-off to a Chinese company if the two companies hit it off. But how serious any of the involved automakers are — including FCA — is subject to questioning.

Chinese companies, whether automakers or not, are all under government pressure to expand outside China through the acquisition of foreign companies. There are also plenty of American brands purchased by Chinese interests in recent years you probably weren’t aware of: AMC Theaters, Motorola, Legendary Entertainment and General Electric’s appliances unit.

In the automotive realm, this drive to expand outside China’s borders prompted Geely’s purchase of Volvo in 2010 and Lotus in 2017. Last week, Bloomberg reported Chinese companies aim to spend around $1.5 trillion purchasing overseas interests over the next decade.

“Right now, Chinese automakers enjoy the full support of the leadership in Beijing to go and make it happen,” Michael Dunne, president of Hong Kong investment advisory company Dunne Automotive, explained to Automotive News. “That’s something brand new, and it’s really picked up since 2015.”

FCA is trying to make itself as appetizing as possible for a buyout by streamlining production. A source claims FCA executives previously traveled to China to meet with Great Wall Motors, while Chinese delegates were spotted at FCA’s headquarters in Auburn Hills, Michigan, as recently as last week. Fiat Chrysler also hosted Cui Tiankai, China’s ambassador to the United States, Zhang Fangyou, chairman of Guangzhou Automobile Group and numerous members of the country’s Communist Party in 2016.

So, what would a hypothetical Chinese partnership with FCA look like? That depends largely on who is doing the buying. While automakers like Geely have taken a decidedly hands-off approach after purchasing automakers, others could be less apt to do so. However, since acquiring Fiat Chrysler serves predominantly as a doorway to Western markets for Chinese companies, it’s unlikely the initial changes made would be drastic.

Still, it’s likely to be less of a partnership and more of a takeover. When Marchionne publicly began his quest to find a suitor for FCA in 2015, he admitted he didn’t believe Asia was interested in partnerships. “I don’t think Asia is partnerable,” he said. “No, you can be acquired by the Asians. I think China will buy you.”

[Images: Fiat Chrysler Automobiles]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • TomHend TomHend on Aug 14, 2017

    Maybe Penske will buy FCA (after the next financial debacle)he tried to buy Saturn (after the last financial debacle)

  • JDG1980 JDG1980 on Aug 14, 2017

    Selling FCA to China would be a bad move. The Italian brands are next to worthless, and buyers of the traditional Chrysler brands (Dodge, Jeep, Ram) tend to be American cultural conservatives who will take a very dim view of buying a Chinese automobile.

    • Guitar man Guitar man on Aug 14, 2017

      Don't worry, they're keeping the Italian brands, its the "massively valuable" US operations they're flogging off.

  • Peter Buying an EV from Toyota is like buying a Bible from Donald Trump. Don’t be surprised if some very important parts are left out.
  • Sheila I have a 2016 Kia Sorento that just threw a rod out of the engine case. Filed a claim for new engine and was denied…..due to a loop hole that was included in the Class Action Engine Settlement so Hyundai and Kia would be able to deny a large percentage of cars with prematurely failed engines. It’s called the KSDS Improvement Campaign. Ever hear of such a thing? It’s not even a Recall, although they know these engines are very dangerous. As unknowing consumers load themselves and kids in them everyday. Are their any new Class Action Lawsuits that anyone knows of?
  • Alan Well, it will take 30 years to fix Nissan up after the Renault Alliance reduced Nissan to a paltry mess.I think Nissan will eventually improve.
  • Alan This will be overpriced for what it offers.I think the "Western" auto manufacturers rip off the consumer with the Thai and Chinese made vehicles.A Chinese made Model 3 in Australia is over $70k AUD(for 1995 $45k USD) which is far more expensive than a similar Chinesium EV of equal or better quality and loaded with goodies.Chinese pickups are $20k to $30k cheaper than Thai built pickups from Ford and the Japanese brands. Who's ripping who off?
  • Alan Years ago Jack Baruth held a "competition" for a piece from the B&B on the oddest pickup story (or something like that). I think 5 people were awarded the prizes.I never received mine, something about being in Australia. If TTAC is global how do you offer prizes to those overseas or are we omitted on the sly from competing?In the end I lost significant respect for Baruth.
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