Fiat Chrysler an enticing takeover target for China

Italian automaker Fiat Chrysler Automobiles would be an attractive target for a Chinese company, putting it instantly at the forefront of the US automotive industry, analysts say.

In July, a known but unnamed Chinese manufacturer made at least one offer to buy Fiat Chrysler at a price assumed above its current market value, announced the industry news site Automotive News earlier this week.

Fiat Chrysler refused to answer AFP questions, but its stock price jumped nearly 10 percent on the news.

According to Automotive News, the Italian-American automotive giant rejected the Chinese company's advances because the offer was too low.

With sales of its models that have fallen in the United States, a Chinese acquisition could offer a line of life to Fiat Chrysler, especially for its brands Chrysler, Dodge and Fiat.

A sale could also provide the means for the company to stimulate its research and development.

"This will not be a merger, it will be a direct sale," said Joseph Phillippi, president of Auto Trends Consulting.

He notes that Fiat Chrysler produces the Jeep and Ram brands that are not only popular in the United States but also in China and elsewhere.

"FCA would have access to the small cars that would be made in China, but could really be quite cunning enough with the FCA design aid."

Fiat Chrysler would not be the first major automaker to be under Chinese control or looking for ways to penetrate this huge market.

The Swedish Volvo was acquired by Geely in China in 2010 and has seen strong sales growth since, with the Chinese market accounting for 20%.

US auto giant General Motors now sells more cars in China than in the US, with 287,500 sold in China in July compared with 226,100 in the US market.

Before its sale in 2009 to bankrupt Fiat, Chrysler was one of the first American manufacturers to plant its flag in China in the early 1980s.

Fiat Chrysler sold 110,000 locally-built cars in China in the first half, in particular as a result of higher sales of Jeeps built by a joint venture with GAC Group.

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