Why Are Chinese Car Companies So Interested In Buying Fiat Chrysler?

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After years of perusing the dating apps, hoping for a multi-billion dollar love connection, Fiat Chrysler has reportedly found itself on the receiving end of a Bachelor-like rose from an unnamed Chinese auto manufacturer. Except, the company has said “thanks, but no thanks,” leaving us with all kinds of questions. 

Is Fiat Chrysler embracing the single life? Why does a Chinese car manufacturer want a piece of the Dodge, Jeep, Ram maker in the first place?

Looking For Love

For years Fiat Chrysler has been pursuing a merger or acquisition with its fellow automakers.

Back in 2015, FCA CEO Sergio Marchionne declared he wanted to hug rival carmaker General Motors so hard they just became one.

“There are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you. Everything starts with physical contact. Then it can degrade, but it starts with physical contact,” Marchionne said at the time, addressing the possibility that the carmaker would seek a hostile take over of GM.

After several attempts to woo GM were rebuffed, FCA set its sights on Volkswagen, which wasn’t exactly saying “No” to the idea at the time.

Just this April, Marchionne said he was ditching his lovelorn ways to concentrate on his company’s bottom line.

A New Suitor

Automotive News reports that FCA recently rejected an offer from a well-known, but unidentified Chinese automaker.

Sources tell Automotive News that FCA declined the proposal, believing the financial terms weren’t enough.

While it’s unclear which Chinese company offered to merge with FCA, sources not that several carmakers have shown interest in the company, including its current joint venture partner, Guangzhou.

Interested automakers have reportedly traveled to FCA’s Michigan headquarters, while FCA executives have traveled to China.

Not For Sale?

Despite FCA’s taste for love, the carmaker appears to be more interested in being the one to make a move, and not the other way around.

The company’s reported rejection of the Chinese carmaker’s offer comes after Marchionne expressed his reluctance to sell his company.

Instead, he suggested that the carmaker was more interested in a partnership with companies in other markets. But that’s something he told Automotive News in 2015 he didn’t see happening with an Asian automaker.

“I don’t think Asia is partnerable,” he said at the time. “No, you can be acquired by the Asians. I think China will buy you.”

What Are They Swiping Right?

Automotive News reports that the Chinese companies may be drawn to FCA amid its own government’s pressure to expand into foreign markets.

The Chinese government’s push, dubbed China Outbound, aims to entice manufacturers to buy international assets and “make their mark,” Automotive News reports.

FCA’s past love-connection desire, along with Marchionne’s recent push to erase the carmaker’s debts by 2019 and the company’s long history, expansive distribution network, and well-known product line, make it an attractive option.

Additionally, Chinese automakers have long looked to break into the U.S. auto market, Automotive News reports, noting that these companies have spent decades — and millions of dollars — to bring their brands to the U.S. via auto shows and other conventions.

These manufacturers have also entered into joint ventures with U.S. automakers in order to learn more about the U.S. market and the way cars are built here.

Automotive News reports that many Chinese manufacturers now feel they have improved the quality of their vehicles enough to begin selling them stateside. Joining forces with a company already well-known in the U.S. could be just the ticket.

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