By on August 22, 2017

All-new 2017 Jeep® Compass Trailhawk - Image: FCAIn what is almost certainly going to be little more than a faint memory in the minds of devoted readers at AmericasJeepLovers.org, the potential relationship between Wang Fengying’s Great Wall Motors Co. and Sergio Marchionne’s Fiat Chrysler Automobiles has taken a turn for the less likely already.

It seems like years ago — no, wait, it seems like yesterday — that Great Wall Motors Co. publicly declared its viability as a suitor for FCA Jeep, the most important, highest-value, primary source of desirability within the FCA family. Jeep, you’ll recall, is likely worth substantially more on its own than the whole of FCA, Jeep included. This explains why it came as no surprise that Great Wall Motors or any other automaker would express an interest in purchasing Jeep from FCA. With huge global potential for a hugely popular brand that hasn’t yet tapped many open markets, Jeep has reach.

But does Great Wall even have the money? Would FCA even entertain the idea of selling off its most valuable component? And is there even any hope of negotiation?

Those were the questions yesterday. Today, Great Wall made clear that the company “had not made any progress so far” in acquiring the Jeep brand and hasn’t even spoken with FCA about the not-so-potential purchase.

With Jeep in the midst of major generational changeovers, U.S. sales have taken a dramatic downturn despite continued health in the SUV/crossover market in which Jeep should, theoretically, exert so much control. The second-generation Jeep Compass is replacing both the old Compass and the departing Patriot, and Jeep is determined to generate a greater share of the Compass’s sales outside the fleet network. The fast-approaching replacement of the JK-generation Jeep Wrangler also reduces demand as The Faithful await the possibility of a more alluring vehicle just around the corner. Jeep’s Cherokee, meanwhile, is aged and now facing strong competition from the Compass. This leaves the Grand Cherokee and Renegade, the two Jeeps which are not, surprisingly, faring the best in comparison with last year.

Nevertheless, Jeep sales are down 13 percent in the U.S. this year, a warning sign for any potential FCA suitor that considers the brand invincible. But the real reason would-be buyers of the Jeep brand, such as China’s Great Wall Motors, have such an interest in the seven-slat grille relates to the limited global exposure of the brand.

The U.S. market accounts for one-fifth of the global auto industry’s volume, yet Jeep only generates one-third of its sales outside of America. No wonder Great Wall is willing to publicly state its Jeep interest. Imagine how powerful Jeep could be if it sold vehicles in large numbers elsewhere.

Wanting Jeep, of course, doesn’t mean you can have Jeep.

[Image: Fiat Chrysler Automobiles]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

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20 Comments on “Great Wall Motors Does Want Jeep; Hasn’t Done Much About It...”


  • avatar
    SCE to AUX

    FCA would certainly consider selling Jeep; they need the money.

    • 0 avatar
      Scoutdude

      Highly unlikely that they would sell the Jeep brand ala carte, maybe sell off the artist formerly known as Chrysler as a whole but they would be stupid to sell off Jeep as it would create a huge dealer relations nightmare taking the profitable J away from the CDJR dealers. At this time most are CDJR dealers because FCA has forced them to stock and sell C’s and D’s if they want J’s and R’s. There is a reason that the consensus is that J is worth more than CDJR + the legacy Fiat brands.

    • 0 avatar
      Guitar man

      They need the money and its the most “valuable” (?) asset they have.

      The vehicles are ancient and the factories hopeless, but the brand is everything. They get cash, and lose a headache.

  • avatar
    matt3319

    Kiss FCA good bye if they do sell Jeep.

  • avatar
    dukeisduke

    Frickin’
    Chinese
    Automobiles

  • avatar
    rpol35

    Without Jeep & Ram, FCA would be over & out.

    It may make sense to sell low volume specialty marks like Alfa Romeo & Maserati (deep six Lancia – it’s as good as gone at this point) and use the proceeds of the sale to try to fix Chrysler, Dodge (which probably means combining them) and Fiat as well. Volume is what FCA needs in order to spread R&D investment and attempt to stay relevant.

  • avatar
    dmoan

    Fiat spent around 10 bill (4.9 bill in cash and 5.5 in debt) to purchase Chrysler but currently FCA is worth only 19 bill (more like 15 bill because of fire sale going on). Chrysler purchase has not helped them a whole lot.

    So at this point they are better off selling the brands because Jeep sales are tanking and poor reliability = more costs in covering warranty fixes in the horizon.

    • 0 avatar
      BuzzDog

      “Chrysler purchase has not helped them a whole lot.”

      Nor did the $2 billion in alimony that GM paid them in 2005, rather than being forced to buy Fiat under the terms of a 2000 joint venture contract. Granted, that was 12 years ago, but I believe that Fiat (and now, FCA) has long been on a slow, downward spiral that was only slowed further by the Hail Mary plays of the 2005 settlement, and later the “opportunity” to acquire Chrysler (when there were no other viable suitors).

  • avatar
    mchan1

    This information was already reported on other sites like WSJ.

    Isn’t the Jeep quality less than stellar?
    The Jeep cultural icon is basically the old timers demographic group which is slowing disappearing. The younger generations don’t care, for the most part.

    The main concern is whether or not the Jeep division is moved to China if it’s sold.

    Fiat is an Italian company that owns Chrysler who’s HQ is still in the U.S.
    Would anyone truly care if the Jeep division is sold off to Great Wall Motors?
    The Italians owners won’t or don’t care!

  • avatar
    28-Cars-Later

    “Wanting Jeep, of course, doesn’t mean you can have Jeep.”

    Might be waiting for FCA to implode and then use it as leverage. Seems like a viable strategy.

    “Imagine how powerful Jeep could be if it sold vehicles in large numbers elsewhere”

    Great, saturate the market and when everyone on Earth has one what will the future sales volume look like?

    • 0 avatar

      Well not Yet FCA profit was up a lot last quarter. In NA their profit percent was the highest in years despite the lagging sales(8.5%). So yeah market share is a problem but the share they have is more profitable then ever. They also have paid off over a billion in debt since the start of the year.

    • 0 avatar
      TW5

      The waiting game is a dubious strategy because FCA’s manic search for a suitor is directly related to CAFE. The longer a potential buyer waits, the less time they have to redesign the entire fleet and integrate hybrid powertrains by 2025.

      Great Wall doesn’t have the technology to comply with CAFE or Euro emissions standards and still meet the demands of Western consumers. That’s why they have not made a bid, imo.

  • avatar
    Lorenzo

    Great Wall is just getting in line for the parting out process that is Sergio’s fallback move. Jeep will probably be sold last, at the highest bid price.

    Otherwise, he can spin off various divisions, the way the Agnelli conglomerate was spun off into separate companies. Then there’ll be one company left holding all the debt, slated for bankruptcy. That’s what was going to happen to Fiat Auto, before Chrysler dropped in Sergio’s lap.

    His big problem is spinning off or selling Fiat early so the founding Agnelli family doesn’t get blamed for its demise. Ram and even Dodge (with factories)would be worth more. I’d expect Chrysler to be the designated repository of debt and oblivion.

    • 0 avatar
      Speed3

      Exactly this. Breaking up the band is plan B. The Agnellis want out, Sergio is retiring and wants his golden parachute. Even if FCA can muddle through on their current trajectory, they in no way have the capital to keep up with investments Toyota, VW, GM, and silicon valley are making in electric and autonomous technology.

      There are a lot of ways FCA can be split up and a lot of value that can be unlocked. A Jeep – Alfa Romeo – Maserati is the spinoff I would like to see (thinking about how well Jaguar Land Rover has done under TATA).

    • 0 avatar
      MGV001

      Agree. If Marchionne can orchestrate a parting out of FCA, it will most likely leave the carcass of Dodge, Chrysler and Fiat for the bankruptcy court to liquidate.

  • avatar
    Speed3

    The New York Times had a good summary of the recent developments: https://www.nytimes.com/2017/08/22/business/fiat-chrysler-china.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

    I do love the quote from Sergio, “We do have to worry about the stump that’s left behind”

    Yes that is quite the stump.

  • avatar
    Whatnext

    Can there be a more literal sign of China eclipsing the USA than the sale of the iconic Jeep brand to “Great Wall Motors”? As someone once said: Sad.

  • avatar
    Vulpine

    Isn’t Great Wall the company that bought the Hummer name, thinking they were buying the rights to the vehicles, too?

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