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China's Great Wall confirms its interest — in Jeep, or all of FCA

HONG KONG/SHANGHAI — Chinese automaker Great Wall Motor reiterated its interest in Fiat Chrysler Automobiles NV on Tuesday, but said it had not held talks or signed a deal with executives at the Italian-American automaker. China's largest sport utility vehicle manufacturer made a direct overture to Fiat Chrysler on Monday, with an official saying the company was interested in all or part of FCA, owner of the Jeep and Ram truck brands. Automotive News first reported the news, quoting Great Wall Motor President Wang Fengying as saying she planned to contact FCA to discuss acquiring the Jeep brand specifically. Those comments sent FCA shares higher but also raised questions over the ability of China's seventh-largest automaker by sales to buy larger Western rival FCA, or even Jeep, which some analysts value at as much as one-and-a-half times FCA. Great Wall sought to dampen speculation on Tuesday. It confirmed it had studied Fiat Chrysler, but said there was "no concrete progress so far" and "substantial uncertainty" over whether it would eventually bid. "The company has not built any relationship with the directors of FCA nor has the company entered into any discussion or signed any agreements with any officer of FCA so far," the company said in an English-language stock exchange filing. It did not give further detail. Fiat Chrysler stock dipped on the statement on Tuesday. Great Wall said trading in its Shanghai-listed shares would resume on Wednesday after having been suspended. Fiat Chrysler declined to comment on Great Wall's statement. On Monday, it said it had not been approached and was fully committed to implementing its current business plan. FLUSHING OUT RIVALS? Great Wall Motor, which was early to spot China's love of SUVs, had revenue of $14.8 billion last year and sold 1.07 million vehicles - but that compares with FCA's 2016 revenue of 111 billion euros ($130.6 billion). Analysts said Great Wall would need to raise both debt and equity to complete any deal, meaning its chairman Wei Jianjun could lose majority control. One possible scenario, according to analysts at Jefferies, would see Wei keeping a roughly 30 percent stake, while Great Wall would raise $10-$14 billion in debt and $10 billion in equity - hefty for a group currently worth just $16 billion. Ultimately, politics could be the clincher.

Stellantis dealer briefing hints at midsize Ram, Jeep Recon, Dodge Stealth

With dealers returning to regular life after Stellantis' Dealer Business Meeting 2023 in Las Vegas last week, bits of intel are escaping. Between reports in Automotive News, Mopar Insiders, and a now-deleted Reddit thread that Carscoops dissected, we can make out rough details about a few products on the way for Chrysler Jeep Dodge Ram stores across the country. We'll start with Chrysler, which got the least attention during the event. The Pentastar, starved of product as if it were Stellantis' version of Jaguar, appears to have a refreshed Pacifica minivan in the works and continues to develop its first EV, due by 2025. That's the alpha and the omega there, at least publicly. Jeep's making moves on several fronts. The Jeep Recon forum got photos of an electrified concept brought to the meeting, the Recon Moab 4xe (pictured). It looks like an upsized Renegade, its tire size thought to be 285/70R17, same as the stock Wrangler Rubicon. Head to the thread to see the rest of the photos.  The end of the Cherokee is but a hiatus, Appearance-wise, a new version in the works is said to be a smaller version of the Grand Cherokee L that's about the same size as the outgoing model. When it launches in late 2024 as a 2025MY SUV, it could debut with a new name as well as hybrid and electric powertrains. The Grand Cherokee L, meanwhile, will get a mid-cycle refresh in 2025.   Adding to information previously reported about the 2024 Jeep Wrangler range, the 2024 Gladiator is said to get a Willys trim with upgraded spec. Mopar Insiders had cited communication to dealers that the Wrangler Willys would improve capability thanks to higher ground clearance and what's expected to be a gripper off-road wheel and tire package. At the dealer meeting, Jeep reps apparently said the Gladiator Willys would get high fenders, a locking rear axle, and 33-inch tires. The current Gladiator Willys fits a Trac-Lok limited-slip rear differential and 32-inch mud terrain tires. The tow rating for the Gladiator range could see an increase from 7,650 pounds to 7,700 pounds. Above that, the Wagoneer range will expand with a 4xe version thought to come by next year. In the Dodge camp, the big news would be that the next Charger won't only be electric. Brand reps allegedly told dealers the car, which will come as a four-door despite the attention lavished on the two-door concept making the rounds, will get an internal combustion engine option.

Fiat Chrysler dumped 40,000 unordered vehicles on dealers

In a move that echoes recent history, Fiat Chrysler has been making more cars and trucks than dealers in the U.S. are willing to accept, with Bloomberg reporting that at one point the automaker had built up a glut of around 40,000 unordered vehicles. That’s led some dealers to accuse FCA of reviving the dreaded “sales bank” accounting practice of obscuring inventory to improve the balance sheet. The company reportedly began building up its inventory of unordered cars this summer despite an industrywide slowdown in sales and an eagerness by some dealers to thin their inventories because rising interest rates are making it more expensive to hold unsold cars. The inventory build-up also coincided with Fiat ChryslerÂ’s efforts to find a merger partner, first with Renault, which fell through, then last monthÂ’s announcement that it will merge with FranceÂ’s PSA Group. FCA denies any such scheme and tells Bloomberg the rising inventory is down to a new predictive analytics system designed to better square supply with demand from dealers that is helping the company save money and narrow the numbers of unsold vehicles. The company recently agreed to pay a $40 million civil penalty to the U.S. Securities and Exchange Commission to settle a complaint that it paid dealers to report fake sales figures over a span of five years. While no one is suggesting that FCA is in dire financial straits — the company saw higher than expected earnings in the third quarter and record profits in North America — the practice has strong historical precedent by Chrysler, which built up bloated inventories in the run-up to its two federal bailouts, in 1980 and 2009. It was also common at GM and Ford during the 2000s, when all three Detroit automakers struggled with excess manufacturing capacity and plummeting sales in the lead-up to the Great Recession. Back in 2012, CFO Magazine wrote about a report that explained automakersÂ’ rationale for the practice and how it works: Say fixed costs for a given factory are $100, and that the factory can make 50 cars. Consumers, however, demand only 10. Under absorption costing, if the company makes all 50 cars, its cost-per-car is $2. If it makes only up to demand, or 10 cars, the cost-per-car is $10. Although each car adds variable costs for steel and other parts, if those costs are low, the company still has an incentive to make more cars to keep the cost-per-car down.