Fiat could be close to raising the cash needed to buy the rest of Chrysler, two people familiar with the matter told Reuters. Apparently, the money will not come from a sale of Alfa to italophile Volkswagen, as previously surmised, but from banks. But knowing banks, they probably won’t simply move the $4 billion across the counter. These days, they often just find a willing buyer for a hefty fee …  

The talks with the banks are expected to conclude next month, and should lead to raising the money needed to buy the 41.5 percent of Chrysler which are held by VEBA, the United Auto Workers’ retirees’ healthcare trust.

Marchionne wants to merge Fiat and Chrysler to use Chrysler’s cash to offset Fiat’s losses. This sounds very familiar to the old DaimlerChrysler lore, usually told with a “merger of equals” tossed in to sound witty. Amazingly, this is yet to be brought up. Perhaps this is because this time, the UAW will be the recipient of the cash. Once they have it, the sermon of “they just drained Chrysler’s cash” can commence anew.

“It may require a miracle to pull off the Fiat chief’s latest gambit,” Reuters writes. To get Fiat out of its rut, Sergio Marchionne has a risky plan: “Take his sporty Alfa Romeo brand global with more expensive models and triple its sales volume by 2016 – after years of losses.”

That plan, says Reuters, “represents Fiat’s only real hope of combating a collapse in its home market and breathing new life into idled factories.” What if it turns out as a bust? “Should it fail, and the new cars flop, the company that Italians view as a cornerstone of their economy will have little choice but to put thousands of employees out of work and tip entire communities into turmoil.”

Reuters and analysts are shaking their heads:

• The new Alfas will be built in Italy, where labor and material costs are far higher than in the United States, Asia or Eastern Europe.
• “Get it wrong, or find consumers aren’t interested, and it will be a financial catastrophe,” says Bernstein analyst Max Warburton.
• Barclays Capital: “It’s not the first time we have heard an ambitious volume plan for Alfa, Volumes were supposed to be 400,000 in 2014 rather than the 70,000 that seems likely.”
• LMC senior analyst Joseph Langley: “Alfa is going to have a fight on its hands in luring luxury buyers into its vehicles, Charging a premium and leaning on heritage is not enough in the highly competitive luxury segments, as Cadillac and Lincoln have experienced.”

Alfa Romeo will outsell Fiat in the United States once the sporty brand gets a foothold in its new market, according to Peter Grady, head of network development for the Chrysler Group, in an interview Reuters.

After nearly 20 years of absence, Alfa is coming back to America in the 4C sports car, due to arrive late this year.

“We think that Alfa Romeo will have a little bit larger volume than Fiat will have,” Grady said.

Outselling Fiat is not much of a target. In 2012, Fiat sold 43,772 units in the U.S.

As we all know, TTAC has an occasional thing for pink cars. So has Fiat. Right where I live.  Fiat delights Japan with the 500 Fiore Rosa (i.e. “Pink Flower”) limited edition of its Cinquecento.

A bit confusingly, only 150 of the pink babies will be available, only for a very short time and a very special occasion: For Valentines! The pinkies can only be bought from  February 14 through 17, yours for only for 2.2 million Yen ($23,600, incl tax.)  I already wanted to run out to buy Frau Schmitto-san hers, but she reminded me of two things:

She does not drive. And in Japan, the girls give the boys Valentine presents.

Did I mention that I love this country? I feel right at home, especially as it embarks on a flower power summer of love revisitation.

(Thank you, Gizmodiva, for the tip. However, it’s not $10,000, the yen has inched up a little.)

Self-concious auto shoppers looking for a cheap, Italian-made vehicle need look no further than Jeep; Fiat announced plans for a $1.3 billion investment in an Italian plant to build a subcompact crossover for Fiat and Jeep.

The new Jeep model will share a platform with the forthcoming Fiat 500X crossover (above), which is slightly larger than the minivan-like 500L that debuted at the Los Angeles Auto Show. With Fiat stuck with so much excess capacity, plants in Italy, Poland, Serbia and Turkey are being marshaled for export duty, and the baby Jeep should help add volume to the underutilized plant in deep South of Italy.

Melfi has also been home to notoriously poor relations between workers and management over the years. The South of Italy is often viewed by its residents as a neglected region of Italy, and investment in the plant will likely be seen as a gesture of goodwill in light of sniping that Fiat has focused too much on its Chrysler acquisition in recent years.

Italy has not intervened with financial support for Fiat because its European losses are more than covered by revenue from its Chrysler unit in the United States, the report says.

In September, Monti held out the possibility of export aid for Fiat, but, says Reuters, Monti’s weekend announcement that he intends to resign from office before Christmas would suggest that any remaining hopes of export-boosting measures are slim.”

New car sales in Italy are set to fall about 20 percent this year to less than 1.4 million. Before the start of the 2008 crisis, Italians bought about 2 million cars a year.

Despite previous calls for his ouster, Fiat’s CEO Sergio Marchionne was elected for another year as president of the influential European auto trade group ACEA, Reuters reports. In July, Volkswagen demanded Marchionne’s head after he had accused Volkswagen of exploiting the European crisis to gain market share by offering aggressive discounts.

“Marchionne is unbearable as president of ACEA,” Volkswagen communications chief Stephan Grühsem told Reuters in July. “In our view, his comments are unqualified yet again. We’re therefore calling on him to step down.” Volkswagen threatened to “exit from the manufacturers association.”

Volkswagen and Fiat made up at the Paris auto show in September, and Marchionne stayed on. The rotating presidency of the carmaker club is shared by French, Italian and German automobile manufacturers. Members Toyota and Hyundai, which were accepted very reluctantly, stand no chance. Presidents rule one or two years.

Aston Martin won’t be sold to the Indians, nor will it be sold to the Chinese. The low-intensity bidding war for the British boutique sports car maker was won by the Italian private equity group Investindustrial. It is buying 37.5 percent for $241 million via a capital increase agreed with majority Kuwaiti owner Investment Dar, Reuters reports after having received confirmation by Aston Martin.

Investindustrial beat tractor maker Mahindra and Mahindra in a two-way battle. Dark horses like Geely, Toyota, or BMW, offered by the media as contenders, did not take part in the bidding.

The cash helps Aston Martin to invest $1 billion in new products and technology, and says, Reuters, to “compete with Volkswagen’s Bentley and rival UK luxury car manufacturer Jaguar Land Rover.” However, in the car business, a billion dollar does not go far. The money is supposed to last through 2018.

Bernstein analyst Max Warburton told Reuters that is looks like a temporary fix because Aston Martin’s owners were unable to attract another car manufacturer to invest at the price they wanted.

“It doesn’t look like a long-term solution,” Warburton said. “This deal doesn’t sort scale, access to technology, emissions or entry to new segments.”

Aston Martin sold 2,340 cars in the nine months to Sept. 30, 19 percent down on 2011.

No agreement has been made on a technical partnership for Aston Martin with Daimler AG’s Mercedes.

Last year, our esteemed Ed in Chief Niedermeyer did intensive research into what was left of then Libyan ruler Muammar Gaddafi’s share holdings in Fiat. Fiat denied that the Colonel had any financial interest in Fiat, but he did. The holdings were seized by the Italian government.

With Gaddafi long gone, Italian magistrates asked a court on Tuesday to free the funds. As it turned out, Libya held 0.33 percent of Fiat, 0.33 percent of Fiat Industrial, along with 1.5 percent of Turin’s soccer club Juventus.

Sergio Marchionne can’t wait to get his hands  on the 41.5 percent of Chrysler, which are in the hands of the UAW’s VEBA trust. Once Fiat is in total control, Fiat and Chrysler could be merged, and the cash could be used to … but you know the drill from years back. Currently at stake are 3.3 percent. Fiat has a call option, but the UAW trust doesn’t want to fork the shares over.

Fiat’s wants to pay $139.7 million, the union demands at least $342 million, says Reuters.

The UAW says it would be a crime to sell the nice shares for anything less than $342 – literally “Sale of the called shares at the price calculated by Fiat would constitute a transaction prohibited by applicable federal law,” the UAW Retiree Medical Benefits Trust said..

Fiat sued. The fund countersued. The matter is now in Chancery court in Delaware.

“Whenever Sergio Marchionne, chief executive of carmakers Fiat and Chrysler, appears in public, television crews jostle to beam his words around the globe. Amid the push and shove it’s easy to miss the tall, curly-headed young man who often looks on from the sidelines.

He’s John Elkann.  And he’s Marchionne’s boss.”“The 36-year-old Elkann is tall, blond and soft-spoken, given to awkward silences during conversations. Marchionne, 60, is rumpled, dark and tart-tongued, reveling in his super-star reputation for pulling Fiat from the brink of bankruptcy eight years ago.”

A fascinating Reuters report about who’s really boss at Fiat. Read it here.

Fiat and Chrysler CEO Sergio Marchionne repeated its pleas that European governments should do something about the overcapacity in  the region. Being in Shanghai when he said that, he recommended that the Chinese government does the same. The governments likely won’t be enthusiastic about Sergio’s advice.

Said Sergio while the Wall Street Journal took notes:

“There is a demand-supply imbalance in Europe, and that needs to be addressed, which has been the reason why I have advocated European Union intervention. Somebody needs to control the process whereby this gets done before we end up creating nationalistic responses that are ultimately going to run right in the face of rational economic choices.”

Marchionne has been demanding that European carmakers take an equal haircut in capacity, something that had been roundly opposed by other EU carmakers, especially those in Germany. Brussels also has shown the cold shoulder to Marchionne’s suggestions. In the meantime, manufacturers like Ford started reducing capacity without government aid.

Overall car sales in Europe in 2012 are expected to be around 12.5 million vehicles, the lowest level since 1993.

Marchionne also suggested that Beijing should streamline its fragmented car industry that suffers from overcapacity and declining growth.

Marchionne repeated his old prediction that after a round of consolidation, only five or six global auto makers would remain. “I think you want at least one of those players to be Chinese,” he told the Chinese audience.

China currently has more than 100 carmakers. In 2011, some 50 carmakers made most of the 80 million automobiles built worldwide. Fiat recently opened a new plant in Chongqing, China, and is planning a few more for the coming years.

For the first time, I am worried that gasoline is at the end of its life cycle. Gas pumps already have landed in the museum.

From a 1930s pump used to fuel Benito Mussolini’s private fleet of cars to a pump used for cigarette lighter refills; the Museo Fisogni in Milan is the most complete collection about the service station (as per the Guinness World Record 2001). Gas pumps even have their own genre in the world of collectibles. They are called “petroliana,” says the Wall Street Journal.

The Museo Fisogni , owned by Guido Fisogni, is in a warehouse near Milan (Italy), but it is  looking for a new home. Next time you are in Italy, drop by. The only thing the museum does not have is gas for your car.

In a research note, Citibank analyst Pilip Watkins told investors that “the reasons for the downgrades aren’t likely to be a particular surprise.” The weak European demand and the inability of Fiat and PSA to compensate it with sales abroad are common knowledge. Nevertheless, says Watkins,  “such low credit ratings for entities that are heavily reliant on debt market access are a real problem in our view and a disadvantage relative to peers.”

“The bigger threat, in our view, is what might happen to the rating of its Financial Services business Banque PSA that finances c.30% of group auto sales,” writes Citibank. Carmakers have access to cheap money through their captive banking arms. If these banks get downgraded as well, then there are huge problems. “Fiat has already moved its main European FS operations into a joint venture with Credit Agricole under the name of FGA Capital which enjoys a 3-notch rating differential to Fiat,” says the research note. PSA is more exposed. Says the note:

“Moody’s has traditionally retained a 2-notch differential between the ratings of Banque PSA and PSA. If it were to retain this (something that should become clearer over the next few days) then Banque PSA would likely lose its investment grade rating. That would severely compromise its business model, in our view, as we believe it would mean loss of access to short-term money markets which we don’t think could be fully substituted in ABS. It would also likely suggest higher funding costs for unsecured debt further disadvantaging it to peers. Of Banque PSA’s debt at end-H112 of c. €22bn, €3.8bn relates to short-term money market funding. Enabling a wider notching differential between PSA and its FS division we imagine would be difficult to achieve though without giving up some ownership of the FS business (the core of PSA’s value in our view). Some form of state support would also seem problematic too given potential objections from peers and the EU.”

Translation of the last sentence: Should Fiat or PSA get into worse trouble than now, they won’t be bailed out as easily as GM or Chrysler. EU rules forbid such bailouts, and the “peers” in Germany would cry murder should the rules be bent. Fiat has a lot of cash sitting in Chrysler, but can’t access it.

Fiat says it sits on a 22.7 billion euro cash pile. CONSOB, the Italian equivalent of the SEC, told Fiat to explain “size and purpose” of its cash position, says Il Messagero in Rome. Fiat says it is not aware of an alleged probe, and that any suggestion that its cash pile was lower than reported in its statements was false, and will be dealt with.

“Any suggestion that Fiat may not have the liquidity stated in its financial statements is false and will be treated as such by Fiat,” Fiat told Reuters. However, the way we read it, Fiat is not accused of overstating its cash. Instead, it is blamed for not spending the money.

On September 24, Fiat CEO Sergio Marchionne said in a speech that he is  ”exasperated” by CONSOB’s “19 letters” between April 2010 and October 2011 that asked for more information about Fiat’s plans to invest in Italy. According to the Economic Times, “Fiat has 12.1 billion euros in cash and equivalents, and Chrysler, in which Fiat has a 58 percent stake, has 10.6 billion euros, it said on July 30. Fiat cannot access Chrysler’s cash because of agreements with Chrysler’s creditors.”

Says the paper:

“The idea of the Italian-Canadian manager is to get Opel at virtually no cost, not unlike what happened with the first installment of Chrysler, and not unlike its proposal for Opel in 2009.”

Influential analysts urge GM to get rid of Opel which lost $16 billion since 1999. Morgan Stanley analyst Adam Jonas said that GM would need to spend up to $13 billion to convince a buyer to take the hot potato, and to fund Opel’s pension obligations. Marchionne is painfully aware of what it costs to restructure an ailing company in Europe.

For the deal to work, GM would have to dissolve its alliance with French PSA Peugeot Citroen, which is said to be on the rocks anyway.  Fiat’s losses in Europe are offset by profits from the U.S , where Fiat “controls Chrysler, giving it a huge cash pile that could be used for acquisitions,” says Reuters,

Il Sole 24 Ore says the deal would be complicated. GM may not want to strengthen its rival Chrysler, where Opel technology would surely end up. Managing two ailing brands, Fiat and Opel, also would be a challenge.

Steve Girksy, chief of Opel’s supervisory board, says his company is not for sale. “GM fully stands behind Opel. Opel is a fully integrated part of GM’s global footprint and vital for GM’s future success in Europe. The GM-PSA alliance is fully on track,” Girsky said in an emailed statement. What else should he say.

In a sit-down with Italy’s Prime Minister Mario Monti , Fiat CEO Sergio Marchionne and chairman John Elkann came to a belated conclusion: A slump in Europe is not such a bad thing of you can sell you cars elsewhere. After the sit-down, Fiat told Reuters that it wants to “re-orient” its business model in Italy “to focus on exports, particularly outside of Europe.” This, the person familiar with the situation said, can mean only one thing: Get ready for made-in-Italy Jeeps and Imported from Torino Chryslers.

Fiat had caused an excrement storm after it said it would halt investments into its European operations and models. It furthermore fanned the flames by stating that a plant in Brazil would gets generous government  aid, while Fiat gets niente from Italy. This caused Marchionne and Elkann to be called on the carpet at Monti’s office in Rome. Both probably didn’t go there with the hope that they would return with a big check.

Students of the European market recall that technocrat Monti served as a European competition commissioner from 1995 to 2004, where he was not seen as a fan of the auto industry. Under him, several European carmakers were fined for their transgressions of free trade. He was a major force behind the European Block Exemption Regulation that busted cushy quasi-monopolies of  carmakers, importers, and dealers and changed the European auto market into a large free-for-all. The carmakers promptly called him (not in his face) “Super Mario,” and the moniker stuck.

It would be foolish to assume that the former free trade hardliner Monti would suddenly flaunt European regulations that generally forbid government support for ailing companies.

At the Monti-meeting, Marchionne and Elkann threw their hands up in “che cosa fameo???” fashion Fiat outlined its forecasts for the Italian and European markets. Then, a statement was issued. TTAC provides the translation:

“Fiat confirmed its strategy of investing in Italy, at the right moment, to develop new products to take full advantage of the recovery of the European market.” Translation: Don’t hold your breath, or you’ll die.

“The Industry Ministry will set up a working group to examine how to improve Fiat’s export capacity.”  Translation: Ouch, now even the exporting will take twice as long.

When it comes to exports outside of the European market, governments’ hands are tied much looser than in the intra-European trade. The biggest export assistance provided by the governments of Italy, Spain, Greece etc. is a low euro. A weak currency makes for strong exports. Except that Fiat’s northern colleagues made maximum use of the opportunity.

Always good for a surprise, Fiat CEO Sergio Marchionne made an unusual announcement. Not only did he tell everybody that Fiat will receive government financing and tax breaks from Brazil, he also said when he received similar help from Italy: A ver long time ago.

“The last time this sort of transaction took place (involving public financing) involving Fiat in Italy was at the start of the 1990s in Melfi,” the statement, quoted by Reuters, said. Hint, hint:  Similar government largesse is verboten under EU rules.

Fiat’s decision to delay investments in Italy came under sharp criticism lately. This is Fiat’s answer.

“We’re in a dramatic situation here, and I’ve never talked about plant closures, I’ve never said I wanted to leave.”

And what about the awful sales of the new Panda? No, it is not selling because it is a bad car, says Marchionne. “It isn’t selling, because there is no market”.

 Fiat Group’s EU sales have been down 17 percent in the first eight months of the year, its home market Italy is down nearly 20 percent. Marchionne led a campaign for communal capacity shedding in Europe, only to attract the ire of mighty Volkswagen.

Reuters says  the Italian government will meet Fiat executives on Saturday to discuss Fiat’s strategy for Italy, the government said in a note on Tuesday.

Turns out that Fiat wasn’t affected too bad by Serbia’s sudden cash crunch. As reported yesterday, the country is having a hard time coming up €90 million it owes Fiat towards a jointly owned car plant in Kragujevac. Fiat has a richer sugar daddy, and he lives in Brussels.  The European Investment Bank sees no reason not to continue disbursing its 500 million euro ($625 million) loan to Fiat, Reuters says. The loan is earmarked for the same plant.

The subsidized loan was granted by the European Union’s finance arm in May 2011, and  ”at the moment we are not aware of any impact on the loan,” a spokesman for the EIB told Reuters  today.

This is how the deal works: The EU pays €500 million, Fiat pays €410 million, Serbia pays €90 million. Except that Serbia will pay a bit later.

The Kragujevac plant opened on April 14 with a capacity of up to 200,000 cars per year.  It builds Fiat’s new 500L, as in large.  The car will be launched next month.

Does Europe need new 200,000 car factories? Guess with a big loan from Brussels, that overcapacity problem suddenly doesn’t look that big anymore.

Fiat saved Chrysler. Now, Chrysler keeps Fiat alive. Fiat would be in deep trouble, would it not be for the huge profits generated at Chrysler.  Fiat’s future is so cloudy that it can’t give guidance for the near future.  Yesterday, Fiat reported a second quarter trading profit of 1 billion euros ($1.23 billion), “bolstered by soaring sales at its U.S. unit Chrysler,” says Reuters.  Today,  Fiat says it has no clue where it will stand by the end of the year.

Fiat says it can’t provide guidance “because of the international economic downturn and a slump in the European car market,” Reuters says.  Fiat promised  “information on products and plants” for when it will present third quarter results in October. Analysts get very grouchy when the company doesn’t tell them how the numbers will look a quarter or six months from now.

Without Chrysler, Fiat booked a 246 million euro  ($302 million) loss for the second quarter.  In Fiat’s home market Italy, overall car sales dropped  21.4 percent in July. Car registrations in Spain and France, where Fiat does considerable business, also caved.

We decided to take a family vacation this summer in Italy, starting in Florence and driving into rural Tuscany to spend a mellow week in a rental villa near some friends. I reserved a “Ford Focus or equivalent” with Hertz and, after a thoroughly unpleasant hour in the queue (“not exactly” indeed), they handed me the keys to an Alfa Romeo Giulietta with a manual transmission, two liter turbo diesel. Forza Italia! I now had one week with the sort of car that American TTAC readers often like to grouse about their inability to buy at home.

First up, the snout. To my American eyes, modern Alfa Romeo cars are very striking. You’ll not mistake them for anything else… at least if you’re looking from the front. That upside-down-triangle grill is loud and proud. While the earlier Alfa 159 accompanied it with a thin headlight bar that gave the resulting car an angry, sharp, purposeful appeal, the Giulietta softens the grill with rounded headlights and front fascia. More than one native Italian we met took positive note of the car.

Enough about styling. How about practicality? The hatchback is big. It’s not as deep as the trunk in our Acura TL but it’s usefully taller, and definitely has more usable space than a VW Golf. All our bags fit comfortably back there with room to spare. Many of the little details of the Alfa are comparable to what you might find in a Golf: switchblade key, comfortable cloth seats with limited manual adjustments, baseball-sized shift knob, etc. Still, the Italians couldn’t help themselves with style over substance. My daughter, 7 years old, had to reach up as high as she could to open the back door, since they moved the handle up next to the C-pillar. My wife, five feet tall, had trouble reaching up to close the hatch when it was open. As the driver, I appreciated the tilt and telescoping wheel. I didn’t appreciate that the clock was in tiny lettering that my passengers couldn’t see.

Interior room is great. The backseat has plenty of space for real adults. The driving position has you sitting relatively high. You have a very good feel for your four corners, which is deeply necessary when navigating some of the smaller streets in old Italian cities and towns.

On to the driving! The diesel has all the benefits and drawbacks that you’d expect. The low redline means you’re shifting much earlier than your gasoline-trained instincts tell you. Likewise, you can run at a much lower RPM than any small gasoline engine would ever tolerate. The computer nags you to shift early, seemingly trying its best to keep the engine under 1200rpm. At a low engine speed like that, you can put your foot down and damn near nothing happens at all. The engine’s personality completely changes around 2000rpm, when the turbo spools up and you suddenly feel the power. Shift before the redline and you’re still in the power band and life’s good. This contrasts, for example, with the Hyundai Veloster (1.6 liter non-turbo, manual) that I test drove a few months ago for giggles. Wind the Veloster up to the redline, shift, and you’ve got nothing. The Giulietta does much better (as, I hope, does the Veloster Turbo). For what it’s worth, the Giulietta’s gear and clutch feel are nothing particularly special. There’s none of Honda’s awesome snickety-snick shifting, and the Giulietta’s clutch grab point is a bit nebulous.

The real standout feature of the Giulietta is its suspension. During our vacation, we ranged from cobblestone streets to zippy autostrada, from smooth twisty cutbacks to bumpy gravel side roads. The Giulietta’s suspension is all about trying to preserve some dignity when faced with punishing roads. Yes, you’ll feel it when driving over crap, but the Giulietta damps out a lot of the vibrations while still keeping things relatively tight. The few times I did some “spirited” driving through the twisties, the car felt comfortable and composed. Still, this is no racing car. Does the Giulietta have “passion and soul” and lovely growling exhaust notes as Top Gear’s James May notes of earlier Alfas?  Maybe the gasoline engines do, but for the diesel, no. It’s a nice car, but you won’t fall in love with it.

Deep down inside, I’m a gadget guy, and this is where the Giulietta let me down. The base-model stereo in our car had no aux input for my phone. According to the owner’s manual, you only get that ten-cent jack with the much pricier “Blu & Me” package. (And, at least on the Fiat 500 I once played with at a Texas dealership, Blu & Me doesn’t include Bluetooth A2DP for stereo music streaming. Boo, hiss!) This was probably the most obvious place where some Fiat Group beancounter blew it for everybody.

Once I figured out how to convert the onscreen menus to English, I saw a long list of adjustments, but no way to fix the things that were most annoying. Foremost, the car raises holy screaming hell if one of your passengers unbuckles before the car has come to a complete stop. Also annoying: the car insists on asking you to shift early and often. What you can do, however, is change the car from “normal” to “dynamic” mode. According to the owner’s manual, this increases max torque by 10%, which you’d never notice. However, it replaces the shift indicator light with the Alfa “DNA” logo. Yes indeed, 10% less guilt definitely improves driving dynamics.

Other gadgety features: the Giulietta will turn the engine off when waiting at a light. Once you push the clutch in, the engine starts back up all by itself. Despite this, if you were dumb enough to turn the key with the car in gear and the clutch engaged, the starter motor happily tries to drag the car along; the ignition doesn’t require you to have the clutch pedal down. (Yes, go ahead, ask me how I figured that out.) The Giulietta has a hill holding feature that works pretty well. It has a rear sonar parking assist to help you nudge your car as far back as it can go. The lights and wipers also have automatic modes. It even auto-restarts the engine if you stall it. (Yes, sigh.)

What about mileage? About half of our driving time was on the autostrada, half on local twisty roads. According to the trip computer, we averaged 5.8 l / 100 km (40.5 mpg). This is the same as the Giulietta’s official “city” mileage rating. (Wikipedia has all the stats.) The Giulietta’s official “combined” rating is 4.7 l / 100km (50 mpg). My freeway driving was pretty sedate, since I wasn’t keen to get ticketed by the autostrada’s ubiquitous speed cameras, so this means that mountain driving, with the turbo spooled up and driving with proper engine braking, is unsurprisingly detrimental to this car’s mileage. At the end of the trip, before I handed the car back, I spent roughly $100 filling the tank for 800 km of driving, with maybe a quarter of a tank left. (What great range!) To drive the same distance and style in my Acura TL, with it’s super-unleaded-mandatory V6, I would have expected to have averaged 20 mpg, yielding roughly the same dollar-cost-per-mile, assuming you’re comfortable with my comparing U.S. gasoline prices with a big V6 sedan against European diesel prices with a smaller turbo 4-cylinder car.

In Europe, the value proposition of the Giulietta is clear: high mileage and excellent interior space in a car that fits into smaller places while giving you decent amounts of “sport” and “style”. Today, in the U.S., the closest car you can buy to the Giulietta is the new Dodge Dart. It’s the same basic platform, but of course you can’t get the diesel or the hatchback. The big question: if cars like the Giulietta diesel or the comparable BMW 180d Sport were offered in the States, how well would they sell? Based on my week in the Giulietta, I’d imagine they could do quite well.

Fiat & Chrysler CEO Sergio Marchionne’s pointed remarks have attracted the ire of Europe’s 500 pound gorilla Volkswagen. VW demanded that Marchionne steps down as president of the European auto manufacturers association ACEA. If he won’t resign, Volkswagen could resign its ACEA membership – which would send the club into instant irrelevancy, not to mention insolvency.

“Marchionne is unbearable as president of ACEA,” Volkswagen communications chief Stephan Grühsem told Reuters. “In our view, his comments are unqualified yet again. We’re therefore calling on him to step down.” If Marchionne won’t heed the call from Wolfsburg, Volkswagen’s “exit from the manufacturers association is an option,” Grühsem told Germany’s Spiegel magazine.

In an article in the New York Times, Sergio Marchionne accused Volkswagen of exploiting the European crisis to gain market share by offering aggressive discounts, “It’s a bloodbath of pricing and it’s a bloodbath on margins,” Marchionne told the paper.

Marchionne currently holds the rotating appointment of the presidency of the European manufacturers club. After he took over, his remarks and initiatives often were regarded as overly reflecting the interests of Fiat and possibly other scratched and dented European makers only, and to run against the interests of the powerful German contingent. By openly attacking Volkswagen, Marchionne burned a bridge too far.

Marchionne is not very popular amongst Europe’s auto CEOs. Privately, some call him an upstart clown, or worse.

We never thought much of De Tomaso’s resurrection. Italian police agrees, thinks De Tomaso’s saviours might be crooks and arrested De Tomaso’s chairman Gian Mario Rossignolo, along with two other men on suspicions of that 7.5 million euros ($9.2 million) of public funds were misused in a failed turnaround plan, Reuters says.

The plan was to use a former Pininfarina  factory on the outskirts of Turin to produce SUVs and sports cars. All is produced were 1,000 unemployed workers.

Sergio Pininfarina died overnight in his Turin home at the age of 85. The company that bears its name designed almost every Ferrari since the 1950s and delivered the shapes of cars from the 1963 Chevrolet Corvette Rondine to the 1996 Peugeot 406 Coupe. Sajeev will have a tribute to the man later on.