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VW's Godfather wants Alfa

2011-03-03 06:29

BRAND IN DECLINE? Any brand equity remaining from Alfa Romeo’s racing success is being squandered by Fiat, with current sales laughably short of expectations. VW thinks it can do better.

The issue of Alfa Romeo’s future ownership continues to be a point of contention among European auto industry analysts.

With the renowned Italian brand failing year after year to reach (rather lofty) sales targets set by parent company Fiat, VW's moved into the fray – posturing a possible take-over of the famous company.

Fiat’s hugely ambitious American market expansion plans, using its recently acquired stake in the Chrysler brand as a Trojan horse, leaves the Italian auto giant unable to redirect the required resources to help ailing Alfa. A sales target of 300 000 units has been set to justify Alfa's existence in the Fiat group yet only 112 000 were badged with the serpent and white cross roundel last year and delivered to their buyers.

GODFATHER HAS SPOKEN

VW’s wildly successful chairman, Ferdinand Piëch, used the 2011 Geneva auto show as another opportunity to make clear his intention to wrest the Alfa brand from Fiat’s control and promised he would increase Alfa sales to 400 000 within five years.

Fiat CEO Sergio Marchionne has refused any offer from VW. "As long as I am CEO of Chrysler and Fiat, Mr Piëch will never have Alfa Romeo," was Marchionne’s simple retort when quizzed about the situation in February, 2011.

Marchionne suggested, in an attempt to further deflect attention from Alfa’s inability to meet sales targets set by his management team, that Piëch’s time and effort would be better spent reviving Seat, VW’s ailing Spanish subsidiary.

MATTER OF TIME

With Marchionne fully focused on making Fiat’s (very risky) expansion into the North American market successful one would hardly bet against Piëch continuing to make overtures for a takeover of Alfa. The VW Group already owns Italy’s Lamborghini, courtesy of a deal facilitated by Audi and directed by Piëch.

With regards to an Alfa takeover, it would appear to only be a matter of time... something VW’s healthy financial position can buy plenty of, unlike Fiat...

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