FCA Could Be Bought By The Chinese Any Day Now

Fiat Chrysler chief Sergio Marchionne has made no secret of his desire for another merger. But without no major automakers in Europe or America showing any interest, Marchionne’s switching his focus to the Far East. And it could bear fruit in the form of a buyout at any moment.

Automotive News reports that FCA has been entertaining offers by several major Chinese automakers. Apparently none of them have been sizable enough, but if any of the leading contenders should increase their bids sufficiently, it could be as simple as signing on the dotted line and handing over the keys to the kingdom.

Among those identified as expressing interest are Guangzhou, Geely, Dongfeng, and Great Wall. FCA and Guangzhou already partner on a joint venture to manufacture in China for the local market, while Geely in particular has been snapping up foreign automakers one after the other – including Volvo, London Taxi, Proton, and Lotus.

The impetus for the foreign expansion reportedly comes from the Chinese government, which has been encouraging domestic manufacturers across multiple industries to buy up companies in their field around the world. Sources expect Chinese companies to spend $1.5 trillion on foreign acquisitions over the next decade. But the prospect of a potential FCA acquisition would satisfy more than Beijing bureaucrats.

Chinese automakers have been desperate to break into the large and lucrative North American market, and with the quality of their products having ostensibly improved, it could come down to infrastructure. And FCA has that in spades: 162 manufacturing plants around the world, 87 R&D facilities, and an extensive dealer network that numbers 2,600 showrooms in the United States alone. Executives from some major Chinese automakers have reportedly even gone so far as to meet with representatives of major American dealer groups in preparation for a possible FCA takeover, with reciprocal delegations traveling between China and Michigan to work out details.

The development follows earlier possibilities for takeover from within the Western world have fallen through – most notably from Volkswagen (whose resources are tied up in the diesel emissions debacle) and General Motors (which was less interested in the prospect than Fiat Chrysler was). With no offers incoming, Marchionne set upon a course to court acquisition, taking steps such as discontinuing production of unprofitable small cars and focusing on the pickups, SUVs, and minivans it does well.

A Chinese takeover would be just the latest in a long history of mergers and acquisitions at Fiat and Chrysler. Aside from the former having acquired the latter, Chrysler (which acquired Jeep and Eagle from the defunct American Motors) was previously owned by Mercedes parent Daimler, while GM previously held 20 percent of Fiat (which had in turn gobbled up Lancia, Alfa Romeo, Maserati, and Ferrari, among others).

While a potential takeover would likely include the Fiat, Chrysler, Dodge, Jeep, and Ram brands, FCA and its owners could spin off certain properties from the group as separate entities – much as it did with Ferrari and the industrial and agricultural divisions under the CNH Global umbrella. Alfa Romeo and Maserati could be separated, as could suppliers like Magneti Marelli, Teksid, and Comau.

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  • Ditzebächer

    A merger with chinese must be stopped. Best would be merging with PSA. They (Citroen, Peugeuot, Opel/Vauxhall) would get a large dealer network in southern europe, north america and some highend brands like Jeep, Alfa and Ferrari to clean up their image. This would be a benefit for all.

    • Jay

      In bed with GM no way!!

    • BOB

      Such merger with PSA is technically impossible, European Union would block becasue of monopoly issues. They had concerns during PSA and Opel case.

    • Giorgos Papaspyros

      Ferrari is not a part of FCA.

      • VaeVictis

        They needed some billions to relaunch Alfa Romeo so they’ve made Ferrari independent and listed in on the stock exchange, but it is still fastened to FCA.

        • Giorgos Papaspyros

          Not owned. Fastened to its own corporate scheme. Period.

          • europeon

            The IPO was another one of Marchionne’s scheme to get some cash, nothing more. “Officially” part of FCA or not, nothing changed, and it’s still owned by the Agnelli-Elkan family.

          • Giorgos Papaspyros

            Controlling stakes or not, it is a separate corporate entity with its own board, investors and accountability, their own interests and businesses.
            Not that simple to mix it up altogether and favoritize a third party,
            especially when the supervisng authorities are US based.

          • europeon

            Again, nothing changed. It’s all a facade to get some cash.
            Ferrari always had it’s own interests and own board that held it accountable.

          • Giorgos Papaspyros

            Well a lot have changed and so demand the authorities overseeing the stock market as well as those people who have put their investments.
            It is the corporate accountability.
            And all this is pure business meaning the way things work in the western world,
            not some kind of sentimentalism.

          • europeon

            We’re not talking about sentimentalism here, but all those changes were and affected only the people behind the curtains, for the end user nothing changes. Who cares Ferrari is a Netherlands-based company and not an Italian one anymore? Barely anyone knows that.

            You can very well use the same argument for any era since Gianni Agnelli and his mafia buddies were the be all and end all.

          • Giorgos Papaspyros

            Things are crystal clear.
            One who buys out FCA, won’t have Ferrari
            because Ferrari is a separate business.

            FYI people behind the curtains who take all major decisions over Ferrari’s future and present,
            are all those affected under the new corporate status.
            So yes in the very end, even you acknowledge how much things have changed.

          • europeon

            Don’t twist my words. Nothing changed for Ferrari, they were always on their own, but very dependent on Fiat.

            Some money exchanged hands, and that’s about it – and I’m willing to bet the *right people* got hold of those shares listed at the IPO.

          • Giorgos Papaspyros

            Let me stress this out once again:
            whoever buys out FCA from its shareholders,
            he won’t be able to take over Ferrari
            simply enough because Ferrari is not owned by FCA.

            There is no need to twist anybody’s words, it is the simple facts that matter.
            And you are just messing things up.

            Ferrari is owned by its own shareholders, and the same thing applies to the FCA.
            Ferrari is not an asset for FCA, but for its own owners.
            We all know what was the purpose when Marchionne was selling Ferrari shares,
            but this is irrelevant to the harsh reality that now Ferrari has got shareholders.

            Anyway the Agnelli family or whatever family can be shareholders to both
            the same way they can be shareholders to anything else they may choose to invest.
            I am sure there are more Ferrari shareholders with interests in many other businesses.

            Under the code of business conduct,
            in order to make two separate businesses bond together
            it needs direct, explicit and legitimate clauses.
            Not some investors who coincidentally own shares in many businesses.

    • supermanuel

      Never going to happen.

    • Alex Rossi

      I believe that the chinese will enter as shareholders in the FCA. But
      they will not sell the FCA to the chinese. Fiat Chrysler Automobiles
      needs new capital to invest in new cars

  • BOB

    Does only I got concerns about Sergio’s moves and overall politics ? For me he seems like not right person as CEO of Flop Crysler Automobile.

  • Giorgos Papaspyros

    Dongfeng already owns a minority stake in PSA.
    PSA needs time to reinvent their portfolio after buying out the loss making Opel/Vauxhall
    and putting another troubled carnaker (FCA) in the equation would make things more complex.

    Interesting though
    it would be a pleasure to see in the flesh a mix of Italian and Chinese reliabiity.

  • europeon
  • ediotsavant

    Great news however you wish to see it. With Chinese money, FCA can fix all their problems and provide better competition to others. I would love to see more Flats and the return of Lancia to the American market.

  • Bob White

    FCA is one of the last few American brands of car company. There are a couple concerns that I have with this idea of FCA being bought by a foreign car compsny. The real big concern I have is the jobs in America from FCA is the foreign car company that buys FCA going to transfer the jobs overseas to cut cost down on manufacturing the new car products the company puts out in the future? Also is the quality of the new cars that are going to be developed going to get worse or better with this new foreign car company? Also is FCA in financial stress that they are in being in desperate need of cash and this is one of the reasons they are looking to sell out. When in the future FCA is bought by a foreign car company will that new car company set up headquarters in America or will there headquarters be overseas? The most important question is what will happen to the Dodge brand i am a huge fan of that brand hopefully the new foreign car company that buys FCA keeps that brand as a muscle car brand or will they switch the Dodge brand to small cars to mid size cars and cuvs?

    • europeon

      > FCA is one of the last few American brands of car company. There are a couple concerns that I have with this idea of FCA being bought by a foreign car compsny.

      So you know, FCA is not an American company.

    • haudit

      How is FCA American? Chrysler LLC became a wholly owned subsidiary of FIAT Spa, a formerly Italian carmaker which is now headquartered in the United Kingdom, and registered in the Netherlands for tax purposes.

      • Six Thousand Times

        A lot of rednecks think Chrysler bought FIAT or that those sneaky Eye-talians stole all of Chrysler’s vast resources.

        • CarCzarDesigner

          Yup! They sure did! Why not?

          • Six Thousand Times

            Not sure if serious.

          • CarCzarDesigner

            No I wasn’t. Both companies merged as a matter of survival and growth as a going concern. Fiat bought Chrysler not the other way around. Some people are going to believe what they want, even if told the facts and the truth.

        • al

          The rednecks also thinks that those cars has a good quality score… they love jeeps and chrylers has only two models, the rest are rams and dodges in all have bad scores, i feel sorry because some have great design but inside reflecs the italian quality, and necer reflects the german one, (ten years ago) daimler can not change the mediocre corporate thinking and the italian match perfect… maybe China can change that?

    • Six Thousand Times

      The smart money says Dodge and Chrysler are goners no matter what happens. No sense in any new investment in either of those brands.

      • CarCzarDesigner

        There is no reason the Chinese couldn’t operate Dodge and Chrysler and do it better than anyone else. They may move some manufacturing back to China, but that is to be expected. Americans would still be part of the company’s workforce, as they are now.

        • MarketAndChurch

          I agree. I would’ love to see what Geely could do with Dodge and Chrysler using Volvo technology.

    • Bob White

      FCA IS A FOREIGN COMPANY. THEY ARE NOT AMERICAN AND AREN’T EVEN REGISTERED IN THE US. Had to shout because you appear to be hard of hearing.

  • EL MATADOR

    Fearrary New Logo

  • klowik

    After the separation, only those rubbish American brands left, and the little unreliable Fiat brand. All the FCA US brands are unreliable and crap and only sold in US and the sale numbers are still far from Ford, GM, Toyota.. With so much competitions , esp, from Korean and Japanese, You will never know when those brands will still exist in the future. Good Riddance! Marchionne!

  • Luc Helterbrand

    “without no”…hmmm…no editors? 🙁

    • Auf Wiedersehen

      You just now figuring that out? Watch their headlines…nuff said

      • Luc Helterbrand

        no, i’ve noticed how poor the grammar is on these sites, but it gets repeated constantly.

  • ME

    BMW should buy them out, but without FCA sharing its parts

  • haudit

    FCA should sell to Geely – they’ve done well with Volvo over the past 7 years.

    • Nordschleife

      I was thinking that as well, but I am concerned with Geely overextending itself and I feel that quality will suffer when more money has to be divided among several other brands.

  • Kash

    I don’t think Geely will try, look at the brands they’ve bought so far, fairly small ones that could be easily turned around, FCA is huge with far too many problems, now if FCA was selling off individual brands that’d be a different story and then I could see Geely snapping something like Chrysler up no problem, Chrysler would fit right in with the Geely brands.

  • Auf Wiedersehen

    The worst possible outcome. But, Im sure Serg will be fine. He will land on his feet, or more likely a pile of cash.

    douche bag

  • supermanuel

    Marchionne is desperate, desperate to sell, merge, set fire to the whole thing and claim on the insurance, before it all comes crashing down around his ears and the whole world sees what a fraud he is.

    • Six Thousand Times

      Maybe or maybe not. If you had a turd in your hand, how tightly would you hold on to it? I’m not a Sergio fan but if you love Chrysler and Dodge, you owe that guy at least a nice card thanking him for keeping your favourites around longer that they would have survived on their own.

      • supermanuel

        I approve entirely of your analogy there. I think it works just fine. And I can see why you would feel gratitude that he has kept a few brands going for longer than they probably would have done without the FCA merger/takeover. You keep squeezing that turd 🙂

        My comment still stands.

        • Six Thousand Times

          Not certain you took my meaning at all. I’m not grateful to Sergio for keeping Dodge and Chrysler alive. I think he should have deep sixed them and used FIAT’s money to build a credible Punto replacement and saved some to do a modern 500 after the retro cuteness of the present one wore off.

          • supermanuel

            Ah, that’s definitely not what came across from your first comment. I was trying to extend some sympathy because it sounded like you were grateful to him. I’m pleased to be corrected. The bloke is an absolute disaster and the fact that any of the FCA brands are still going is astonishing.

            Incidentally, I’ve had all 3 versions of the Punto in my time, all new, and all perfectly reliable and well-judged cars. I was looking forward to getting my eldest son into one now that he is of driving age but that’s not going to happen whilst the current one is 12 years old with no replacement on the horizon.

  • VaeVictis

    If Alfa Romeo is not part of the deal I suspect Dodge isn’t either. They were supposed to share platforms and engines. Alfa can’t survive without Dodge.

    • europeon

      > Alfa can’t survive without Dodge.

      LOL

    • LeStori

      OK…so we take out the bits of Alfa Romeo that are currently not Dodge tech and what would be have. No engine, no chassis, no body. So we are sitting in our driveway on the ground ….

      • Six Thousand Times

        How do idiots like you keep spinning such nonsense. There’s no such thing as Dodge tech. Some old MB platforms and a cast-iron engine.

        • europeon

          I keep wondering where is this coming from? I mean, there should have been someone that told them this nonsense, because they seem the kind of people that have problems tying their own shoes (I suspect they wear CROCS tho), let alone come by themselves to any kind of conclusion, even flawed as this is.

        • LeStori

          OOPs I could have phrased that differently.Got too complicated for myself. It was meant to say something along the lines that the body, the engine, and the chassis are all Italian. Nothing to do with any technology that Dodge may or may not have. If we took out all the Italian tech in current Alfa Romeos we would be sitting on the ground wondering where the car was.

          • Six Thousand Times

            Italian tech makes more sense. I thought you were one of those knuckleheads who thought Chrysler brought all of the expertise into the deal when FIAT bought them.

  • MarketAndChurch

    A Chinese made dodge will never sell with American consumers. The only major issue here, apart from giving Beijing greater legal hold over the global corporate world, is the likely transfer of American jobs to China, which is a very real concern.

    A Geely takeover might be promising though, especially if they let Volvo take the lead on things because of Volvo’s greater knowledge of the American market.

    • CarCzarDesigner

      In reading your comments, I somewhat agree with you. But I don’t think the Chinese would automatically send production to back to China if they bought Dodge & Chrysler. Other Foreign makes are building/ assembling cars here and are making a profit. The Chinese can too. Or they could send more production to Mexico.

      Also, there is too much speculation here on what could happen if Geely acquired Dodge & Chrysler. I don’t think it would develop to be as robust as you are currently thinking or wishing for. For all we know, Chrysler and Dodge could under the Geely tent, essentially become a low grade competitor to lesser known, run of the mill, Chinese brands. There are lots of premium brands fighting for presence on the roads in China. Why give a not so successful American brand with a semi-hostile, national relationship any due respect?

      • MarketAndChurch

        You know, you’re probably right about job displacement. I don’t think having small and midsize cars built in Mexico will do much to alleviate the anxiety surrounding the issue, but at least then it wouldn’t be China which is viewed by Americans as an easy out.

        I think the Dodge and Jeep names have too much brand cache in the United States(and for Jeep, globally) for Geely to degrade them in that way. What I personally see happening would be for Volvo to take the lead on Chrysler corp, and leverage the 11 billion Geely has invested into it by spreading that R&D cost across the Chrysler brands to help Chrysler/Dodge/Jeep develop their next generation of cars. In other words, I’m talking about Volvo-based Dodge/Chrysler cars and CUV’s. Jeep and Ram are both profitable and self-sustaining, and can use greater access to technology, while also giving Volvo and Geely access to trucks and off-road capable SUV’s, a market segment that looks fit for growth in China. This would also give Geely an immediate expansive network of American dealers were they to bring over their own cars to the United States, an aspiration many Chinese brands have long held.

        So my primary line of thinking here would be for Geely to spread the 11 billion it has invested into Volvo across more car brands, and over time, make it back completely were Volvo-based Dodge and Chrysler cars successful in the United States, while also cashing in on America’s love for trucks and our SUV fetish. They sell about 500,000 Volvo’s annually, which is about the same amount that Ram sells a year.

  • Blade t

    Dodge/Chrysler being owned by the Chinese,, terrible….

  • Juan Alvarez

    I wonder if Trump know about this potential deal.

    • Six Thousand Times

      He might just haul off and send a few nasty tweets…

  • Bob White

    FCA IS A FOREIGN COMPANY. One of the many corporations that don’t pay any taxes.

    The next performance car will be THE DRAGON. Lol

  • S3XY

    Bum cars. Didn’t this ugly meatball say he was going to produce more EV’s than Tesla. Haha

  • atomicbri

    Hmm… so I am going to go out on a limb here and say that it sounds to me like the Agnelli family and their holding company, Exor has been using all the current FCA budgeted money they can to create the Maserati and Alfa platforms (which would totally explain why we’ve seen no new products from Chrysler and Dodge for sure) and then sell off the major parts of the company (I’m sure they were never fond of Chrysler et al) to the highest bidder, but can’t pick up the good stuff (except Jeep). Sounds shady to me. Poor Chrysler, they have never had serious buyers to help them out of their doldrums.

  • eb110americana

    “…Chrysler was previously owned by Mercedes parent Daimler…”
    Actually, the previous owner was Cerberus. They did the hard work of de-crapifying the interiors after Daimler-Benz got through with them.

    The biggest thing lacking in both Fiat and Chrysler’s arsenal is reliability. They really ought to merge with a Japanese brand for that. Mazda is pretty small, so they wouldn’t bring much to the table financially, but they could offer a lot in terms of rigorous quality checks at all levels. I would actually trust Mazda to preserve the unique cultures of both American and Italian brands (and they did do the 124 Spyder after all).

    Last interesting bit is the curse of Jeep. If you have never heard of it, Jeep is always the most recognized brand and most valuable asset of their collective portfolio, but whomever buys the lot shall perish (Woooo…).

    1940 – Originally engineered by the bankrupt American Bantam Car Company at the demand of the US military, the design was given to Willys-Overland (and Ford, who produced the model with Willys-Overland’s design modifications).

    1945 – Willys produced the first civilian Jeeps

    1953 – Willys bought by Kaiser Motors

    1963 – Renamed Kaiser-Jeep

    1970 – American Motors Co. bought Jeep from Kaiser, which was all that remained of Kaiser’s automotive business at that point.

    1987 – Chrysler bought AMC primarily for Jeep (AMC phased out for “Jeep-Eagle” dealerships)

    And, well, you know the rest…

  • gary4205

    Nope. Bad idea.

  • Dariush

    Impale Marchionne.

  • Alex Rossi

    I believe that the chinese will enter as shareholders in the FCA. But they will not sell the FCA to the chinese. Fiat Chrysler Automobiles needs new capital to invest in new cars

  • Ettore Fieramosca

    FCA is too big to be buyed by chinese automakers. The biggest is 1/10 of FCA. A merger? Yes is possible. The 10% of FCA for the 100% of Great Wall. These are the values.

  • kidcat24

    Nice we get Chinese products, Chinese come to the U.S.A. with our money and buy up U.S.A. companies. They own AMC theaters, Smithfield Foods, One Chase Manhattan Plaza, and many more. http://money.cnn.com/interactive/economy/chinese-acquisitions-us-companies/

  • Socarboy

    I look for FCA to sell Jeep 1st (hopefully to GM or Ford), RAM 2nd (most likely to Hyundai) as for the rest maybe Alpha to VW ? and I guess the Chinese can get the rest.