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There are several reasons why Chinese automaker Great Wall Motors would target Jeep for acquisition, not least of which is the brand’s rapid growth in recent years.

What is unclear is why Fiat Chrysler Automobiles would want to sell Jeep individually.

A Great Wall spokesman confirmed Monday the company’s “intention” of pursuing Jeep, The Associated Press reported. That news came roughly a week after reports indicated an unnamed Chinese company had been looking at purchasing Fiat Chrysler in its entirety.

And Fiat Chrysler released a statement saying: “In response to market rumors regarding a potential interest of Great Wall Motors in the Jeep brand, Fiat Chrysler Automobiles ... confirmed that it has not been approached by Great Wall Motors in connection with the Jeep brand or any other matter relating to its business. FCA is fully committed to its 2014-18 plan, having achieved each one of its targets to date and with only six quarters left to its completion.”

Many analysts think selling Jeep on its own – not as part bigger deal for the automaker as a whole or with other parts of its operations – could be a mistake.

The Agnelli family, which controls the majority of Fiat Chrysler, has long sought to exit the volume-car business, said Dave Sullivan, an analyst with AutoPacific. So getting rid of some of the holdings under the company’s umbrella might make sense. And CEO Sergio Marchionne has been vocal about his interest in taking on a partner or an outright sale of Fiat Chrysler, meaning the company is not afraid of a major shakeup.

But Jeep and the Ram truck line are considered Fiat Chrysler’s most highly valued properties. Without Jeep, analysts said the automaker would be greatly diminished.

“It would be great for a buyer, if you could only buy just Jeep,” Sullivan said. “That sounds like an amazing opportunity. It does not leave much left, however.”

Jeep has enjoyed several years of strong growth. Although U.S. sales dropped by 13 percent in the first half of 2017, that has been due mainly to a restructuring of Jeep production in the U.S. The brand remains highly prized and would be, perhaps, the strongest enticement for anyone to partner with or purchase Fiat Chrysler.

“Jeep is the crown jewels,” said Michelle Krebs, an executive analyst for Autotrader. “A number of companies would love to get their hands on Jeep.

“The question is, would FCA spin off Jeep to just sell it? I don’t think so.”

Established in 1984, Great Wall is China’s largest manufacturer of SUVs and pickups. Jeep’s history goes back further, with production of Willis MB Jeeps cranking up in 1941 for the U.S. military.

A joining of the two companies might prove problematic, particularly on the political front. Trade tensions with China have intensified with President Donald Trump in the White House. On Friday, the Trump administration said the U.S. would begin investigating alleged technology and intellectual theft by the communist nation. On Monday, the Chinese Commerce Ministry called the investigation “irresponsible.”

In addition, the sale of a company bailed out by U.S. tax dollars would not be greeted with enthusiasm, particularly with the heart of Jeep manufacturing centered in the Midwest.

Chinese companies in industries from autos to robots are spending billions of dollars to acquire brands and technology to strengthen their competitive position at home and speed their development. Great Wall Motors, headquartered in Baoding, southwest of Beijing, is one of a series of independent Chinese automakers that have grown up alongside state-owned giants such as Shanghai Automotive Industries.

In 2010, China-owned Geely acquired Swedish carmaker Volvo from Ford.

David Cole, chairman emeritus of the Ann Arbor-based Center for Automotive Research, told The Detroit News earlier this month, “It’s potentially much broader than the Chinese. My gut feel is someone steps up and buys” FCA. “They’re a publicly traded company.”

Jeep would be a major coup for Great Wall, Sullivan said.

“(A Jeep purchase) would get Great Wall a distribution network that they don’t have in the U.S. today,” he said. “That’s one of the biggest barriers to entry for an automaker coming in to the U.S. It’s very expensive to get a dealer network up and running.”

Both Sullivan and Krebs said a Fiat Chrysler without Jeep could cause other trouble for the automaker. While Ram is a successful brand, the pickup segment is competitive and Ram might be hurt by any doubts about Fiat Chrysler’s future commitment.

And it is unclear what Jeep’s departure might mean for American brands like Chrysler and Dodge, as well as European brands like Fiat and Alfa Romeo.

jlynch@detroitnews.com

(313) 222-2034

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