The U.S. auto industry has hit a bump in the road in 2017, but a pair of major players may soon be getting a green light in China. On Tuesday, Ford Motor Co. (NYSE: F) announced it is in talks to produce electric vehicles in China, and a Chinese automaker just confirmed interest in buying at least part of Fiat Chrysler Automobiles ( FCAU).
Ford has signed a memorandum of understanding with China’s Anhui Zotye Automobile, which produces electric vehicles. The two auto companies are in talks to form a joint venture to sell electric cars in China.
Ford has been criticized for falling behind its competition during the industry’s transition to the electric era. U.S. rival General Motors Co. ( GM) launched its fully-electric, long-range Chevy Bolt in December 2016, and Tesla ( TSLA) began production of its highly-anticipated electric Model 3 in July.
[See: 7 of the Best Stocks to Buy for 2017.]
Earlier this year, Ford announced that its first fully electric long-range vehicle will be ready for production in 2020.
Ford investors are hoping a new partnership in China, new leadership and a new sense of urgency in pursuing electric vehicle technology will help wake Ford from its slumber. Ford stock is now down 38 percent in the past three years.
“While the ultimate success of new CEO Jim Hackett remains to be seen, we believe a renewed focus or potential announcements on cost reductions and improvements in capital efficiency could reinvigorate interest in the stock,” Barclays analyst Brian Johnson says.
Fiat Chrysler has been actively seeking a potential buyer in recent years, but no company has stepped up with a bid. On Monday, China’s Great Wall Motor Co. confirmed interest in acquiring Fiat Chrysler’s Jeep brand. Jeep is one of Fiat’s four major U.S. brands alongside Chrysler, Dodge and Ram.
In a statement, Fiat Chrysler says it “had not been approached by Great Wall Motors in connection with the Jeep brand or any other matter relating to its business.” Investors appear to be taking the reports with a grain of salt, as Fiat’s stock opened Tuesday’s session down 0.3 percent.
[Read: Why the Auto Industry Is in Trouble (F, GM, TM).]
U.S. auto investors are facing growing headwinds in what appears to be the beginning of a cyclical downturn in the market. U.S. auto sales declined for the fifth consecutive month in July.
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Struggling U.S. Auto Companies Looking to China (FCAU, F) originally appeared on usnews.com
