Fiat not selling Alfa Romeo to Volkswagen

Fiat CEO Sergio Marchionne has made it clear that despite Volkswagen’s interest in purchasing the beleaguered Alfa Romeo , Fiat has no plans of selling the Italian brand.

Reports are saying that Marchionne has every intention of holding on to Alfa Romeo despite the brand losing $416 million a year, an estimate made by Max Warburton, a Sanford C. Bernstein analyst in London.

Fiat has already invested 2 billion on the brand and Marchionne still has plans of reviving Alfa Romeo. One of the moves he has made in doing so is bringing the car back to the US beginning in 2012 with the Giulia sedan and another SUV that the company is building in collaboration with Chrysler .

Yet despite the moves that are being made, it’s still a far-fetched assumption to think that the brand can sell 300,000 units a year by 2013 – Marchionne’s benchmark – especially when you consider that in the first nine months of this year, Alfa Romeo has sputtered to meet 80,000 units.

Continued after the jump.

Source: Bloomberg

A big reason as to why Marchionne is holding on to Alfa Romeo amid the strong interest from Volkswagen is that the brand is the only way Fiat can make a dent in the high-end car segment. Marco Santino, a consultant with A.T. Kearney in Rome, thinks that the project of reviving Alfa Romeo isn’t a short term deal, but one that should take the look of a long-term project. “In the short run, he has no chance of meeting the targets,” the consultant said.

Volkswagen supervisory board Chairman Ferdinand Piech has said that the company is willing to take Alfa Romeo off of Fiat’s hands, but the offer has been continuously rebuffed by Marchionne. Whether it’s the right move or not remains to be seen and Fiat is going to have to squeeze every ounce of patience they have in their bodies to wait for Alfa Romeo to turn the corner.

Otherwise, they’d be wasting a perfectly good opportunity to strike while the interest in the brand is still hot.


1 comments:

Why sell Alfa - and why buy Alfa?

Alfa died years ago...

Today Alfas are (same thing can be said for Lancia) just Fiat platforms with an other bodywork.

Volkswagen’s Alfas would become just VW platforms with an other bodywork - similar to Audi (cum grano salis), Seat and Skoda.

Alfa remaining a Fiat brand, will become partly an European Chrysler, with Chrysler platform and an other bodywork... (Same thing can be said about Lancia.)

And Chrysler Europe will become an other bodywork on a Lancia (i.e. Fiat) platform...

Once upon a time, GM built Cadillac, Chevrolet, Oldsmobile, Pontiac and Buick, of course. Bodyworks... Where have alle the brand names gone..?

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