China’s Great Wall confirms interest in buying Fiat Chrysler

China’s Great Wall Motor Co Ltd (HKG:2333) confirmed interest in buying Fiat Chrysler Automobiles, according to a spokesperson from Great Wall on Monday.

Confirmation of the speculation sent shares in Fiat Chrysler Automobiles surging four percent on Monday morning. They have risen ten percent over the past week, surrounding rumours of deals.

Fiat Chrysler Automobiles has not confirmed Great Wall’s interest, saying it “had not been approached by Great Wall relating to Jeep or any matter relating to its business”.

The Italian motor manufacturer is valued at €16.4 billion and own Fiat, Chrysler and Jeep, Alfa Romeo, Dodge, Lancia, Maserati and Ram trucks marques.

Sergio Marchionne, FCA Chief Executive, has said he is working on a five-year business plan but hopes for a buyer or partner to help manage the rising costs as well as develop the technology for electric and autonomous cars.

“Great Wall is very keen to get into the SUV products of FCA. In its home market about 80pc of Great Wall’s sales are SUVs and it is under pressure to deliver new models against serious competition – Jeep could be a way of doing that and would certainly lend it a certain cachet having the Jeep brand,” said Professor David Bailey, car industry analyst at Aston University.

Fiat Chrysler Automobiles is the eighth largest car manufacturer in the world. They sold 1.153 million cars in the first quarter of 2017. By comparison, Great Wall is the 19th largest car manufacturer. They sold 226,062 vehicles in the first quarter of 2017.

If the deal goes ahead, it would be China’s largest overseas automotive industry deal as well as one of the largest ever overseas industry deals.

China is becoming increasingly involved in the global car industry. Chinese billionaire, Li Shufu’s Geely, has bought Volvo, Lotus and the London Taxi Company.