Chinese SUV manufacturer Great Wall Motors announced its interest in purchasing American car company Jeep, in an attempt by the foreign competitor to expand globally.
A company spokesman confirmed the bid interest on Monday, though a formal offer has not been made, the Associated Press reported.
In a statement, Jeep owner Fiat Chrysler, responding to what it called “market rumors,” said it has not been approached by Great Wall Motors for any business matters. Nevertheless, shares of Great Wall and Fiat Chrysler jumped on the possibility of a tie-up.
Great Wall Motors did not immediately respond to a request for comment.
The bid attempt isn’t a surprise to many in the auto industry, since Fiat Chrysler chief executive Sergio Marchionne has made no secret of his desire for a merger or buyer to better position the world’s seventh-largest car company to compete globally against the likes of Volkswagen and Toyota. He previously pursued a deal with General Motors.
In April, he said Chrysler’s Jeep and Dodge brands are strong enough to stand alone like Ferrari, which the company spun off in 2015.
Italian automaker Fiat merged with Chrysler after the American auto giant stumbled during the Great Recession and filed for bankruptcy protection in 2009. The conglomerate’s brands include not just Fiat and Chrysler, but Alfa Romero, Maserati, Dodge, Ram and Jeep among others.
Adam Jonas, a Morgan Stanley analyst, said in a research note Monday that Jeep — at $24 billion — may be worth more than the rest of Fiat Chrysler combined. In 2016, Jeep sold roughly 1.4 million vehicles, accounting for about half of Fiat Chrysler’s sales.
By comparison, Great Wall Motors sold nearly 1.1 million cars last year, with most sales coming from China.
Great Wall’s interest is the latest by a Chinese company eager to build out a global brand and expand its industry know-how. China’s Geely Holding Group bought Volvo Cars from Ford in 2010. Earlier this year, Geely bought a controlling interest in British sports-car maker Lotus.
In 2011, a state-owned Chinese automaker, Dongfeng Motor Group, bought 14 percent of France’s PSA Peugeot Citroen, Europe’s second-largest automaker, according to the Associated Press.
Great Wall Motors, based in Baoding, southwest of Beijing, has been eyeing the North American market for a while. In April, it expressed interest in buying a manufacturing plant in Mexico. According to the AP, the company took shape from a collective founded in the 1980s to repair and customize vehicles. The company launched its first sedan in 1993 but narrowed its focus a decade ago to SUVs.
Its interest in a top brand from what was once one of the United States’s Big Three automakers is likely to ruffle some feathers in Washington as President Trump has promised to stop domestic companies from leaving the country. Michelle Krebs, a senior analyst at the car shopping site Autotrader, said a deal could draw criticism from those pushing consumers to “buy American.”
A purchase could also face problems with the Chinese government. Fiat Chrysler currently manufactures Jeeps in China with a Chinese partner. The government also continues to revisit its own automobile regulations. In March, the government announced changes to the tax benefits on buying electric cars, which has slowed Tesla sales.
In 2010, Chinese regulators blocked the sale of Hummer, the oversized SUV and gas-guzzler, to Sichuan Tengzhong Heavy Industrial Machinery from GM after it found the company didn’t have a rational purchase plan.
Marchionne, 65, has signaled his interest in retiring in the next couple of years to focus his energies at Ferrari, where he is also chief executive. Krebs, the Autotrader analyst, said the executive probably wants to conclude one last big transaction before he exits the stage.
“Jeep is the crown jewel of Fiat Chrysler,” she said. “A sports-utility maker from China interested in the most iconic, revered sports-utility brand with Jeep is a winner.”