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Redusernab Asks: Would selling Jeep to a Chinese company be all that bad?

Alan Cesar August 29, 2017 Redusernab Asks 31 Comments

The word “iconic” gets thrown around a lot, but it’s hard to come up with a brand more suited to that title than Jeep. Born out of our military and proved out in World War II, that seven-slot grille is an American symbol known around the world. It would be a shame for that steadfast image of American might to be owned by the Chinese. Or would it?

Sergio Marchionne, CEO of Fiat-Chrysler, has been kicking around the idea of selling off the Jeep brand. It has enormous brand cachet and is capable of pulling in big profits: Combined with Ram trucks, it’s responsible for a mind-boggling . Selling such a valuable asset would mean a cash influx of roughly $19 billion for Fiat-Chrysler. Now there’s news that Great Wall, a Chinese automaker, .

It’s not like this is the first time other countries have had their fingers inside those seven slots. American Motors sourced some parts from Renault when they were making Jeeps. Chrysler itself has been at times owned by a German company and a private investment fund before the Italians. The Jeep Renegade at its core is a rebodied Fiat 500X.

There are other examples outside of that, too: Quintessentially Swedish automaker Volvo, previously owned by Ford, was bought by Geely in 2010. Since then it’s made a valiant return to station wagons and has built some of the most attractive cars in its history.

Jaguar and Land Rover (also previously Ford properties, which they had bought from BWM), now belong to Tata Motors, an Indian company, and is in a 50:50 joint venture with Chinese automaker Chery. Is it more a dilution of the British national pride to for those brands to be owned by Indians or Chinese than Germans or Americans?

Perhaps Jeep is more special than Saab, Lamborghini, or Bentley. Maybe it means more to us and to the world to keep Jeep American. To let it fall into foreign hands is to admit that nothing is sacred; maybe it’s akin to ordering apple pie at a —it might be good, but it’s not the same.

So. It’s your turn to hem and haw. Is it heresy to sell Jeep to a Chinese company? Would you still buy one?

  • P161911

    The Germans and Italians owned Jeep. The Japanese don’t get a turn to complete the Axis Powers Trifecta?

    Also, it sounds like the C in FCA would go away without Jeep and Ram.

    • engineerd

      I was wondering the same thing about the Axis Powers Trifecta. I would think Sergio would be calling Toyota every day trying to get them to buy Jeep rather than the Chinese.

      • Vairship

        Maye Suzuki can buy them? That way they can have a line-up consisting of the Samurai, the Vitara, the Wrangler, the Cherokee and the Ram!

    • Kiefmo

      Aw man — which big Japanese name would be best to purchase Jeep?

      Nissan, Toyota, and Mitsubishi already have competitors for most Jeeps, so they aren’t naturals unless you want the next Wrangler to be a badge job of a Land Cruiser, Patrol, or Pajero (the next version of which will be a badge job Patrol already now that Mitsu is tied up with Nissan).

      Honda, on the other hand, has never had a true off-roader, not counting Isuzu rebadges and, of course, its ATVs. Imagine a Wrangler packing a range of Honda engines, from the 2.2L diesel up to the 3.5L V6 that seems to run circles around the 3.6L Pentastar despite a lower quoted power output. Imagine applying the active differential controls from the VTM-4 and SH-AWD systems to the articulate Jeep solid axles.

      I could dig the Honda-owned Jeep.

      • Rover 1

        Honda were involved with a Jeep rival in the past, it didn’t last. (In more ways than one, Honda’s internal warranty claim record is held by this vehicle.)
        The first Honda Crossroad.

        • Kiefmo

          I’m vaguely aware of Honda’s badgejob Disco, a result of the same thinking that gave us the Acura SLX and Honda Passport, but that’s a little different than the controlling interest kind of purchase that I’m thinking, in which Honda engineering is infused into Jeep.

      • cap’n fast

        there is a large gap in the engineering between Jeep and all things Honda. Hammer and chisel vs. dental drill.
        i believe if Honda took Jeep, the only thing Honda would like to keep is the cache of Jeepness. why? seriously? Jeeps are junk…

    • Alff

      Sounds like F and C would piss away $19B trying to turn things around, having sold the crown jewel. As an investor, I’d think this is a terrible decision unless the proceeds of the sale are distributed to shareholders. Even then, I’d have little interest in holding shares the remaining company.

      • jeepjeff

        I think you are right. I will laugh mightily and joke about the Jeep Curse mercilessly if FCA goes under after selling Jeep.

      • Fuhrman16

        Yeah, seems like a short term gain, long term loss sort of plan.

      • Ted Odell

        My thoughts exactly. Why sell the assets that has the most profit and highest brand value?

        • Vairship

          Sell Jeep/Ram for $19 Billion, shut down the rest and Marchionne and the Agnelli family run off with the money.

      • Vairship

        Fiat Chrysler Automobiles (FCA) would first rename themselves to Fiat Chrysler Unit (FCU), and then (as they sold the only profitable part), delete the C leaving the shareholders with…

      • cap’n fast

        well, the UAW would be like slavering wolves in a baby nursery. what long term product plan would FCA have to replace the profits of Jeepness? building more Fiat 500 spinoffs isn’t a good answer. should be getting over that sooner than later. Hybrid Jeep type replacement? Wait. wouldn’t Honda want FCA to stay away from Jeepness as part of the deal? you know, keep from diluting the Jeepness market?
        what direction would FCA take if those avenues closed to them?
        too many variables open to screwing the pooch for FCA to succeed staying profitable. sell now.

  • engineerd

    It most likely would not be the worst thing that could happen. And we can’t even be that upset that this iconic brand isn’t owned by Americans any more.

    Frankly, I was surprised Cerberus never split Jeep off and sold it as a separate entity. It is by far the most valuable brand in the Chrysler umbrella.

  • dukeisduke

    Just sell them the whole shootin’ match. Then they can change the meaning of the initials, as proposed in a letter to the editor at The Autoextremist:

    Frickin’
    Chinese
    Automobiles

  • JayP

    Volvo has been strong under Geely.
    MG hasn’t under SAIC.

    • My take: the nationality of the owner has nothing to do with business success, product quality, or general style of both how the business is conducted and the product is marketed.

      • JayP

        I wholly expected Volvo to flake out with Geely but they’ve shoveled money and it’s paid off. I’ve been impressed.

  • jeepjeff

    Ugh. No. That’s just awful. I will be sad. Fortunately, I already own the perfect Jeep.

  • ptschett

    If China owns a meaningful amount of FCA I’ll be a Ford or GM customer the next time I’m shopping.

  • crank_case

    Jeep schmeep, I’d be more worried about someone messing up Alfa Romeo just as it was finding its mojo.

  • SoldierofaDifferentStripe

    Without Jeeps & Ram trucks, FCA amounts to junk stocks. No way should the Chinese get a foothold in the US automotive market thru one of our own. Set up their own dealership network of completely Chinese made autos. Let them fall flat like so many others trying to make it in the US have.

    • P161911

      GM is now selling vehicles made in China.

      • dukeisduke

        Yes, and I’m curious to see what the reliability and long-term durability of the Envision looks like.

    • outback_ute

      I did hear a suggestion that Jeep and Ram would be a good fit for Hyundai/Kia, or PSA as other alternatives to Chinese auto companies. Honda as suggested above could work too.

      • Vairship

        PSA will have their hands full with Opel.

        • outback_ute

          True, but Jeep and Ram would extend their portfolio in a way that Opel won’t.

          I heard a quote that I think was from a PSA exec, joking that they bought Opel because Germans won’t buy French cars!

          • Vairship

            That’s probably true. I think buying Opel was purely a defensive move: buy a big competitor before someone else does and turns them around. The overlap between PSA and Opel seems almost 100%, so I would expect Opel and Vauxhall to soon be rebadged Peugeots and Citroens.

            Jeep and Ram on the other hand might extend their portfolio too far: they’re mostly big in the US, but might be too small as a stand-alone US brand, yet selling Peugeots/Citroens/Opels here will likely not be successful (see Renault/Peugeot/Saturn/Merkur/Alfa Romeo attempts).

  • Borkwagen

    Note that Jaguar was never owned by BMW, just Land Rover. The wording is vague up there.

  • cap’n fast

    the concept of why the US market for high Jeep/Ram sales is foreign to Chinese and Japanese marketers. they do not get it. the Japanese are about tech. the Chinese are about control. maintaining that control. and both are about profits. and more profits. Jeep/Ram concepts are about utility and usefulness and getting the hell out of dodge whenever the whim overtakes work ethics. Salaryman doesn’t get that. just the idea of letting that adventurous streak take hold and getting out of town and into the boonies any time you can is not something the Chinese would like everyone in China doing. or possibly even knowing that one can. both would be more interested in making the next generation one size fits all uses crapcan.
    i still call my truck a Dodge. not a ram. trashy marketing garbage. it’s a fricking Dodge, you asshats. see. that’s what they won’t get. that attitude. yeah, Jeep’s are junk but they are our junk. they don’t get that either. would Jeep sales still be thru the roof if a Chinese or Japanese company bought it? Don’t know.

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