It has been a topsy-turvy week for the Jeep brand where its possible acquisition by China’s Great Wall Motor is concerned. First GWM confirmed it was interested, but apparently hadn’t made its interest clear to FCA. Then GWM backed off. Sounds like flirting to me.
I know GWM pretty well. I visited it in the mid-90’s when I lived in Beijing. I like GWM, admire its female president Wang Fengying, and have long rooted for it to succeed in its quest to become the world’s largest SUV maker. Acquiring the Jeep brand would be a big step in that direction. But I have my doubts it will occur.
GWM would have to find the financing. To be sure, China’s government, through a state-owned bank, could fund the deal. Harder to find, methinks, would be the management skills to absorb a brand such as Jeep, taking advantage of its strengths and bolstering it where it is weak. Then there is the need to obtain the approval of the U.S. government to acquire the brand, which shouldn’t be a problem but then we are living in strange times.
Perhaps I am being too pessimistic. I doubted Li Shufu’s Geely would be able to successfully absorb Volvo and that has worked out well. I am sure that we will hear more from GWM and FCA regarding an acquisition. Should be fun.
Back here in the U.S., light vehicle sales are slowing, right? Well, it depends on how you slice and dice the market, points out Fred O’Halloran, a consultant who works with buy sell firm MD Johnson, Inc. Car sales are down, but SUV and truck sales are up. And while the SAAR may be off a bit from last year, sales per dealership are basically holding steady. What does that mean for dealership values? Read his column in this week’s issue to find out.
Also this week, Ira Silver returns to our pages with a primer in what makes for a “quality” acquisition. Hint: It is more than just a good franchise.
And of course we have Transaction News.
Enjoy!
