It is no secret that Sergio Marchionne has been looking for a buyer to take on Fiat Chrysler Automobiles for the past two years. But no one seemed seriously interested.
That has changed.
Automotive News has learned from various sources that a number of Chinese automakers are conducting appraisals into FCA, with some meeting with representatives of U.S. retail groups about a potential acquisition last week. One source revealed that FCA executives have traveled to China to meet with Great Wall Motor Co. and that Chinese delegations were at FCA's HQ. AN also reports that a well-known Chinese automaker has put forth an offer this month for the company, but was turned down as it wasn't enough money to do a sale.
It is unclear which Chinese automakers are looking at FCA. Aside from Great Wall, sources say Dongfeng Motor Corp., Zhejiang Geely Holding Group, and Guangzhou Automobile Group (FCA's joint venture partner in China) are interested. Unsurprisingly, FCA and the Chinese automakers are keeping their mouths shut.
Why are Chinese automakers suddenly interested in FCA? Part of it comes from the government putting pressure on companies to expand beyond China. A government directive called China Outbound is pushing Chinese companies "to acquire international assets from their industries and operate them "to make their mark."
"Right now, Chinese automakers enjoy the full support of the leadership in Beijing to go and make it happen. That's something brand new, and it's really picked up since 2015," said Michael Dunne, president of Dunne Automotive based in Hong Kong.
A key example is Geely acquiring Volvo back in 2010.
Also, FCA provides Chinese Automakers wanting to enter the U.S. something akin to a turnkey operation. FCA has about 2,600 dealers in the U.S., along with extensive networks in Canada and Mexico. Worldwide, FCA has 162 manufacturing operations and 87 research and development centers - something that would appeal to Chinese Automakers.
So if a deal was worked out, what would a Chinese Automaker be getting? According to a source, the sale would include Jeep and Ram Trucks - FCA's profit makers, along with Chrysler, Dodge, and Fiat. Alfa Romeo and Maserati would be spun off to maximize returns for Exor - holding company controlled by Agnelli family which holds a controlling interest in FCA.
Source: Automotive News (Subscription Required)