Great Wall wants Jeep

UPDATE 22/08/2017 11:00am: Fiat Chrysler Automobiles has issued a formal statement saying it has not been approached by Great Walls Motors regarding the purchase of Jeep.

"In response to market rumours regarding a potential interest of Great Wall Motors in the Jeep brand, Fiat Chrysler Automobiles ("FCA") (NYSE: FCAU MTA: FCA) confirmed that it has not been approached by Great Wall Motors in connection with the Jeep brand or any other matter relating to its business," said FCA.

"FCA is fully committed to its 2014-18 plan, having achieved each one of its targets to date and with only six quarters left to its completion."

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Great Wall Motors has reportedly begun negotiations with Fiat Chrysler Automobiles (FCA) in a bid to purchase its iconic Jeep brand.

If successful, the Chinese car-maker would satisfy its aim of becoming the world's largest SUV-maker.

Sending FCA's share price rocketing, the news that Great Wall had begun negotiating a deal was revealed in an email from Great Wall president, Wang Fengying, to Automotive News.

Jeep is by far the most valuable part of the FCA-owned brands and, according to some analysts speaking to the US newswire, without the liabilities of the company's Fiat, Chrysler, Dodge and RAM brands would be worth more on its own than FCA in its entirety.

It's not the first time cutting Jeep loose from FCA has been suggested.

Back in April of this year CEO Sergio Marchionne reportedly told journalists that Jeep could part company with FCA if he could find a buyer.

It's not known when Great Wall plans to officially make an offer for Jeep, nor how much it's willing to pay, but a spokesman for Great Wall confirmed the car-maker was "deeply interested in the Jeep brand" and that its strategic goal was to become the "world's largest SUV maker".

"Acquiring Jeep, a global SUV brand, would enable us to achieve our goal sooner and better," said the Great Wall spokesman.

The Chinese brand has already made a significant investment in the US with new R&D facilities already up and running in both Detroit and California, ahead of the launch of its Haval SUV brand there.

Last year Great Wall, China's seventh biggest car-maker, manufactured 1.1 million vehicles and posted a profit of $US14.76 billion -- a fraction of the $US131 billion FCA made over the same period.

Despite the discrepancy, Great Wall claimed it was confident it could raise the appropriate funds to make a deal.

Great Wall's public expression of interest in Jeep has been seen as a risky strategy by the Chinese car-maker within the car industry.

Automotive News suggests, such a public declaration could trigger a bidding war from not only other Chinese car-makers but Indian ones too, and even some European brands might get involved.

Jeep ownership, for example, could finally give Volkswagen Group the keys to huge sales in North America, helping the car giant finally cement itself as the world's biggest and best-selling global car-maker.

Meantime, a tie-up with VW could provide Jeep with the tools and resources it needs to improve the quality of the cars its makes, although untangling the US SUV-maker from FCA's complex, multi-branded Chrysler, Dodge, RAM dealership network in the US could prove too much, even for the German car-maker.

According to Automotive News, Jeep manufactured 1.41 million vehicles last year and has an estimated worth of around $US33.5 billion.

FCA, meanwhile, has been valued at $US32 billion.

Despite the news that Great Wall has entered negotiations to buy Jeep, FCA has denied it is in talks with the Chinese auto-maker.