China's Great Wall Motor saw its share price slide Wednesday after saying it had "not engaged in negotiations" with Italian-American carmaker Fiat Chrysler to buy the Jeep brand.
The Chinese manufacturer, known for its sport-utility vehicles, had signalled Monday its interest in Fiat Chrysler Automobiles (FCA), before moving to dampen speculation about a bid for Jeep.
In an announcement Tuesday night, Great Wall said it had "not contacted" senior FCA staff, adding that "no real progress has been made" regarding any acquisition.
Great Wall ranks only the seventh biggest Chinese auto company in terms of sales -- 1.07 million vehicles in China and 17,400 abroad last year -- but any deal with FCA would take it to another level.
An agreement would be a major coup for the Chinese auto industry but could cause political waves in the United States, where President Donald Trump has railed against his country's trade imbalance with the Asian giant.
But Great Wall's stock fell 1.58 percent in Shanghai Wednesday after the firm's statement. Hong Kong's stock exchange was closed due to Typhoon Hato.
FCA's shares had soared in Milan on reports of a potential deal.
China is the world's biggest car market and sales of SUVs soared by 45 percent last year, with nine million units sold, according to industry figures.
Fiat Chrysler sold 110,000 locally built vehicles in China in the first half of the year, in particular thanks to rising sales of Jeeps built by a joint venture with GAC Group.