This partnership could benefit both sides

For those who were surprised to see GAC Motors at the 2018 Detroit Auto Show, don’t be. The Chinese automaker has made plans to enter the U.S. market known. Now it looks like it may have found a door to enter, one that’s being opened by Fiat Chrysler Automobiles. A report from The New York Times revealed that the automakers are in discussions on a partnership that will allow FCA dealerships to sell GAC models in the US as early as 2019.

GAC Could Make its U.S. Launch Via FCA Dealerships
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Part of that goal is already underway as GAC is lining up a development center in Michigan and a design center in Los Angeles

GAC president Yu Juan made no bones about his desire to bring GAC to the U.S. In his mind, America is the barometer that will determine whether GAC can become the global auto brand it aspires to become. “We intend to gain a foothold in the U.S.,” he said in a news conference. “If we can make it in the U.S., we can make it anywhere and enhance further possibilities of future growth.”

Part of that goal is already underway as GAC is lining up a development center in Michigan and a design center in Los Angeles. The two offices could open as early as the first half of this year, joining the tech lab the company opened in Silicon Valley last year. But more than just opening centers in these American cities, GAC’s ultimate goal is to establish a partnership with a North American sales company that can help develop its dealership network. That’s where FCA comes into the picture.

The two automakers already a enjoy a close business relationship — GAC manufacturers Jeep models for the Chinese market — so a new layer to that relationship isn’t out of the cards. Even FCA CEO Sergio Marchionne expressed a willingness to help GAC gain a foothold in the U.S. market. “We are talking to them about how and if we can help if they come to the U.S.,” Marchionne said in his own news conference in Detroit.

GAC Could Make its U.S. Launch Via FCA Dealerships
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Should FCA and GAC come to an understanding, expect both parties to benefit from the deal

It’s worth noting, too, that part of that willingness on FCA’s part stems from a need to bolster its own dealership network, which has been plagued by a lack of model diversity. Dodge and Chrysler, for example, no longer offer small or mid-sized cars. Go to Chrysler’s website, and you’ll see that the once proud automaker only has two models in its portfolio, the 300 full-sized sedan and the Pacifica minivan. That’s it. Dodge isn’t doing better, either. Outside of niche performance cars like the Charger and the Challenger, Dodge only has the Durango, Journey, and Grand Caravan in its offering. The lack of diversity has already taken its toll on FCA dealerships, a lot of whom have become desperate for some variety in their offerings. Having GAC models in these dealerships should help quell those concerns. Sure, the Chinese automaker’s first offering is another SUV, the GS8, but the company is already planning to develop two additional models, one of which could be a small or mid-sized vehicle.

Should FCA and GAC come to an understanding, expect both parties to benefit from the deal. The partnership could even stretch into co-developing future technologies — electrification and autonomous driving — that has jumped into the forefront among automakers all over the world. A potential partnership between FCA and GAC could be beneficial for both companies.

GAC Could Make its U.S. Launch Via FCA Dealerships
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Just don’t expect the latter to use the name of its flagship brand, Trumpchi, in the U.S. While there’s nothing implicitly wrong about it, the close resemblance to Donald Trump, the current commander-in-chief, may have unintended consequences in the promotion of the brand.

References

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Source: NY Times

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