Jeep: Why This American Icon Could Soon Be Part Of A Chinese Company The Chinese company Great Wall Motor has expressed interest in acquiring the Jeep brand from Fiat Chrysler Automobiles. Sales of Jeep and other U.S. brands have been growing in China.
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Jeep: Why This American Icon Could Soon Be Part Of A Chinese Company

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Jeep: Why This American Icon Could Soon Be Part Of A Chinese Company

Jeep: Why This American Icon Could Soon Be Part Of A Chinese Company

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ARI SHAPIRO, HOST:

There are few brands more quintessentially American than Jeep. And now it seems possible that a foreign company could purchase Jeep from Fiat-Chrysler, its parent company. At the moment these are just rumors. Those rumors point to larger trends in the auto industry, though. Jeep traces its history to World War II and helped create the sport utility vehicle. NPR's Sonari Glinton is with us to talk Jeep, SUVs and China.

SONARI GLINTON, BYLINE: Hey, Ari.

SHAPIRO: Tell us about this Chinese company that wants to buy Jeep.

GLINTON: The company is Great Wall Motors. And like many Chinese companies, it has these grand global ambitions. China is the largest auto market, and it's continuing to grow. Tariffs there and taxes and the way things are set up mean that some Chinese companies have been protected from competition and protected from some of the markets. So they have grown. And they have these deep pockets. And they're looking to sort of acquire other companies. An example would be Geely, which owns Volvo.

SHAPIRO: Why specifically would Jeep be a target for acquisition?

GLINTON: Well, in one way, as, you know, me and my colleagues were arguing at the business desk - we were talking about the word iconic - Jeep...

SHAPIRO: Whether we overuse the word?

GLINTON: Yeah. We...

SHAPIRO: But Jeep is an icon, you're going to say (laughter).

GLINTON: Yes, Jeep is definitely an icon 'cause it represents America. You can - when you see a Jeep, you know, you see the American GI going over a hedge row or fording a river. It represents who we are. And it also represents the growth market in the auto industry. The Chinese have a love affair with the SUV just like we are. IHS market, which predicts these sort of things, looked back and said that in 2010, when the market in China was 10 percent SUVs, by 2020 it's going to be 40 percent SUVs. So all the growth is in this SUV segment, and they're really, really profitable. So if you're a car company, you want an SUV brand that's really strong.

SHAPIRO: That explains why a Chinese company would want to buy Jeep. Why would Fiat-Chrysler want to sell it?

GLINTON: Well, Chrysler has been considered the sick man of Detroit for a while. It's the company that received two government bailouts. It's switched owners many times. And it's had a hard time having a long-term strategy. It also has a quality problem. It ends up being, you know, sort of at the bottom of, say, Consumer Reports reliability studies. But those brands are valuable. I mean, you know, Jeep and Ram represent well over 90 percent of profits at Chrysler. So it's a profitable bauble that Fiat has probably wanted to get rid of for a while. And the CEO, Sergio Marchionne, has said just as much.

SHAPIRO: Do you think this is going to happen?

GLINTON: I can't see, Ari, this particular deal happening. But, you know, the Jeep brand is so valuable. And so are, actually, some of the other brands associated with Chrysler. They - Sergio Marchionne, the CEO of the company, has been shopping the idea of a sale around for a few years now. So you can see that he kind of wants to do it. I definitely see that there's someone, you know, looking at Jeep because in part it represents America. It is so - you know, I have this photo of Steve McQueen standing in a river holding back a Jeep. It is - it is a great brand, and people are going to want it.

But will this one happen? I don't see it. Also, there is some pressure not only here about selling to a Chinese brand. And that's hard to see when this brand is so important to jobs in places like Detroit. It's one of the few brands actually built inside the city of Detroit. Detroit, Toledo and Kokomo - and that region, Kokomo, Ind. - they really do depend on this brand. It is really valuable to sort of the industrial, you know, center of the country.

SHAPIRO: That's NPR's Sonari Glinton. Thanks a lot.

GLINTON: Thank you, Ari.

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