Chinese automaker Great Wall Motors says it is interested in buying the Jeep brand from its owner FCA. It is not surprising that Great Wall wants the Jeep brand. Jeep already has a global brand reputation and iconic value that goes back to its birth during World War II.
Great Wall set up a research & development facility in Detroit this year and is using it in part to learn more about the U.S. market. It also has a research & development center in Los Angeles, and this year it said it was reconsidering building a plant in Mexico because of concerns over threats by President Donald Trump to renegotiate the North American Free Trade Agreement. Building in the U.S., where Great Wall hopes to sell its Haval brand SUVs eventually, would hedge against trade concerns.
Although Great Wall generates much less annual revenue than FCA, about USD14.76 billion vs. USD131 billion, Great Wall Motors is confident it could raise funds to make an acquisition occur. Great Wall has a strong track record in making good profits and is also listed in Hong Kong and Shanghai.
Now that Jeep is up for sale as a standalone brand could set off a bidding war with other possible buyers. There might be a bid from Indian auto conglomerate Mahindra who are experienced manufacturers of trucks and off-road vehicles.
For Great Wall Motors and Mahindra, they just need to follow the same formula that Geely Auto used when investing in Swedish carmaker Volvo, and Tata Group used when purchasing Jaguar Land Rover, this could easily allow Jeep to become one of the most powerful brands in the world.
Geely and Tata both invested money into their new acquisitions and gave the management the freedom to reinvent their brands. As a result, Volvo and Jaguar Land Rover are very successful and profitable with great new products. Jeep could be the next big thing with the right new owner.
