GWM: Chinese specialist in urban SUVs eyeing to buy Jeep

Beijing - Great Wall Motor Company, China's seventh-largest carmaker, specialises in urban SUVs and wants to move upmarket - which could explain its apparent interest in the Jeep brand.

Great Wall confirmed on Monday (August 21) its interest in buying all or part of the Italian-American group Fiat Chrysler (FCA).

According to the US publication Automotive News, the Chinese firm is specifically eyeing the Jeep brand.

READ: Chinese GWM to purchase Fiat Chrysler?

Great Wall, founded in 1984 and based in Hebei province close to Beijing, has built a reputation in urban sport utility vehicles and these now account for 80% of its production.

In a highly competitive Chinese automotive market, Great Wall sold 1.07 million vehicles last year, up 26% from the previous year.

Urban SUVs are highly popular among Chinese drivers who want to feel safe in cities where road accidents are commonplace.

Sales of SUVs of all brands jumped by 45% in 2016 to 9.05 million units, according to the China Association of Automobile Manufacturers.

It is in this market that 100% Chinese-owned brands like Great Wall are gaining momentum: they accounted for about 60% of sales of SUVs in the country in 2016.

But the group faces rising competition in the sector, which may cut into its profit margins. According to analyst estimates compiled by Bloomberg, Great Wall will likely report a plunge of almost 80% in net income in the second quarter of 2017.

Under these conditions, the manufacturer is openly seeking to upgrade to more expensive and more profitable vehicles.

This ambition could favour the acquisition of Jeep, a premium brand long renowned for its quality in China.