Fiat Chrysler an enticing takeover target for China
Italian-American car maker Fiat Chrysler Automobiles would be an alluring takeover target for a Chinese company, instantly putting it at the top rung of the US auto industry, analysts say.
In July, a well-known but unnamed Chinese automaker made at least one offer to buy Fiat Chrysler at a price supposedly above its current market value, the industry news site Automotive News reported earlier this week.
Fiat Chrysler declined to answer questions from AFP but its share price jumped nearly 10 percent on the news.
According to Automotive News, the Italian-American auto giant rejected the Chinese company's advances, because the offer was too low.
With sales of its models ebbing in the United States, a Chinese acquisition could offer a lifeline to Fiat Chrysler, in particular for its Chrysler, Dodge and Fiat brands.
A sale also could provide the means for the company to boost its research and development.
"It won't be a merger. It will be an outright sale," said Joseph Phillippi, president of Auto Trends Consulting.
He notes that Fiat Chrysler produces the Jeep and Ram brands which not only are popular in the United States but also in China and elsewhere.
"FCA would get access to small cars that would be made in China but could really be something pretty nifty with FCA's design help."
Fiat Chrysler would not be the first major automaker to come under Chinese control or to look for ways to break into that huge market.
Sweden's Volvo was acquired by China's Geely in 2010 and has seen strong sales growth since, with the Chinese market accounting for 20 percent.
US auto giant General Motors now sells more cars in China than in the United States, with 287,500 sold in China in July compared to 226,100 in the US market.
Before its 2009 sale to Fiat in a bankruptcy, Chrysler was one of the first US automakers to plant its flag in China at the start of the 1980s.
Fiat Chrysler sold 110,000 locally-built cars in China in the first half of the year, in particular thanks to rising sales of Jeeps built by a joint venture with GAC Group.