Volkswagen, Fiat Discussing Alfa Romeo Sale

by Derek Kreindler

Published: April 3rd, 2013

volkswagen fiat discussing alfa romeo sale

VW and Fiat are in talks regarding a possible sale of Alfa Romeo. The sale of Alfa Romeo to Audi would also include the Pomilgiano assembly plant in Naples, which once made Alfas, but currently produces the Fiat Panda. Magnetti Marelli, Fiat’s famed parts maker, may also be included in the deal, as Fiat looks to raise cash so it can buy the remaining shares of Chrysler off the UAW’s Voluntary Employee Benefits Association.

Meanwhile, Audi has already established a presence in Italy with both Lamborghini, Ducati and Italdesign. Adding Alfa Romeo and an Italian plant would only entrench its standing, and the sale of an assembly plant would be mutually beneficial for both VW and Fiat, as Alfa could retain its “Made in Italy” heritage while Fiat looks like a hero by ensuring that the plant and its workers have some security. Of course, nobody knows what VW would even do with Alfa, considering its sales picture is even bleaker than VW’s ailing SEAT brand.

#AlfaRomeo #AlfaRomeoGiulietta #Audi #Chrysler #Italy #Sale #Volkswagen #VW

Derek Kreindler

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9 of 91 comments

Checker on Apr 05, 2013

If Alfa gets sold to VW, then what brand will Fiat use to replace Alfa's positioning? Will Fiat turn Dodge into a fully global brand?

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- GTAm on Apr 05, 2013
  
  Unlikely. Marchionne as said many times that Alfa and Jeep are the only truly global brand. They'll probably have to bring Maser a notch down. I don't see that happening as that would mean lower margins from the Maser brand.
  
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- Lorenzo on Apr 05, 2013
  
  @GTAm I can see Jeep as a global brand, but Alfa? That's a bit of Italian puffery to me. OTOH, the Mopar pentastar is well known globally, and Dodge, even Chrysler, could use it to advantage. Global brands must be full range, mass produced vehicles, not niche products. Sergio must be thinking of Alfa as a smaller, upscale world model using Fiat's underpowered multi-air engines. What may kill Sergio's hopes is the lack of a torquey, fuel efficient engine below the Pentastar V6.
  
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- GTAm on Apr 06, 2013
  
  @Lorenzo You will be amazed at how well Alfa Romeo is known in all corners of the world. As I live in Asia I know how strong and even revered the brand was. Globally there are 350+ Alfa Clubs. The highest of any brand and they spread to all corners of the world. Watch the 4C launch speech by Harald Wester. He refers to leveraging on this popularity. It's decades of neglect and under investment that have destroyed sales. "Fiat’s underpowered multi-air engines"??? The Multi Air engines are class leading in power torque and emissions. Please check. Then there's the new All Alu 1750 in the 4C that's said to be good for 300bhp. There's also the Maserati V6's which were designed by Ferrari.
  
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- Th009 on Apr 06, 2013
  
  @GTAm As you say, decades of neglect and underinvestment. Oh, but it's different now, you say, there are great products coming and Alfa Romeo has a glorious future under Fiat? Well, consider this: "Under Alfa Romeo brand, the auto manufacturer will release Junior, which will compete with BMW Mini, in 2008, a C-segment sporty hatchback and 8C Spider, which is a soft-top 2-seat car, in 2009, and a crossover model in between SUV and coupe, and the 169 sporty sedan in 2010." This was from Fiat's 2007 plan, which set the goal of increasing sales from 140K to 300K by 2010. How did that go? How about the 2010 plan that set the goal of 500K units by 2014, with seven new models by 2014, and US re-introduction in 2012? Why is it that everything will be different this time?
  
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Athos Nobile on Apr 06, 2013

In your first paragraph you basically stated the reasons for which ANY OEM with the means would be interested in buying the brand.

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GTAm on Apr 08, 2013

@th009 Why is that everything will be different this time? In a one word answer - "Chrysler". Chrysler gives Fiat a massive jolt in economies of scale in development expenses, parts ordering and sales reach. The plans changed for many reasons. 1. Priority was given and resources focused on the Chrysler takeover. And quite rightly so from a business perspective. 2. EU and especially Italy were heading for disaster. Marchionne read this early. 3.He used the situation as a bargaining tool with the Italian unions whose work practices were/are inefficient. This is a well known fact. Could Fiat have successfully launched the 500 in the US without the Chrysler dealer network? I don't think so. Those dealers are now waiting for a much bigger range including Alfa Romeo. Another reason why it should work this time is....... the 4C. It's an amazing car like Alfas used to be. Cutting edge tech, class leading performance, driving pleasure oriented philosophy and stunning looks. The management seems to have realized where they went wrong all these years by launching a car like the 4C to relaunch the brands. The 8C was a bit half-hearted. Harald Wester talks about leveraging of the popularity of the brand through clubs globally. These things were never considered before.

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- Morea on Apr 08, 2013
  
  I don't see the 4C as reviving Alfa's fortunes because: 1) It is a limited product model, only a few thousand will be made per year due to the limited rate at which the carbon fiber tubs can be produced; 2) Fiat has already floated the idea of a V6 or V8 version for Maserati, this will undercut sales of the Alfa version; 3) Lotus tried this concept with the Exige which never sold more than a few thousand per year. The 4C is a stunning car but it will not make Fiat any money nor produce much of a bump in sales of existing Alfa models.
  
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Loquoman on Jan 13, 2014

Since the Fiat group eoncompases many companies like for example New Holland, RAM Trucks, Case, Jeep, Iveco and Ferrari, it's not clear why must they sell Alfa to VW. That must be a rummor started at VW/Audi, the last thing Fiat will want to do is help them. IMO, Fiat plans were to invest in Alfa's revival, but they got an incredible chance to buy Chrysler for cheap during the financial crisis. At this point Fiat investments seem to be in the RAM half-ton and HD trucks, Jeep Grand Cherokee, Fiat 500 product line and Maserati. They picked Maserati ahead of Alfa, because that brand is stronger, so they can command a hefty premium and make money on much lower volumes. Maserati also already has worldwide distribution. The Alfa 156 and 147 averaged around 50,000 anual units during their production runs, despite being some of the best designed cars ever. Both European Cars of the Year with great dynamics, huge variety of engines and several variants. IMO Marchione is doing the right thing with the 8C Competizione and 4C models, to add strenght to the brand and to re-introduce the brand in North America. Of their premium brands, there is a clear difference between Ferrari and Maserati. Ferrari is the more upscale and sporty brand, while Maserati makes GT, 4 door luxury and exucutive sedans and will introduce a new Grand Cherokee based model. Alfa will probably sit bellow that, making smaller halo sports cars then Ferrari plus sporty oriented super minis, small family and small executive cars and an executive model. They are also certain to add Jeep Cherokee and Grand Cherokee derived SUV's. 80-90% of sales volume for BMW, Audi and Mercedes-Benz come from that type of cars and SUV's. Lancia should be a womens brand. And Fiat should add more models to the 500 line with their generalistic models. Fiat is doing fine in Brazil, where VW was once the indisputed leader, maybe they should expand in other emerging markets too.

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