Seat to die as VW eyes Alfa?
Although it already owns the renowned Lamborghini brand via Audi, Volkswagen’s keen on another fabled Italian car maker.
The latest news from Europe is that Ferdinand Piëch is soon to wrest Alfa Romeo from Fiat’s control.
Why would VW be after a brand which retails front-wheel drive cars on the lingering lustre of an erstwhile F1 heritage from the 1950s? Simple really - technical prowess.
Fiat’s outstanding advances in front-wheel drive engine and transmission technology packaging (especially its MultiAir engines) make VW’s desire to bring the Italian brand under its control driven by engineering value, not sales numbers.
Canvassing the numbers, Alfa Romeo is a non-starter.
Too small to matter?
Last year the Italian brand sold a touch more than 100 000 cars. Negligible by global standards. In fact, Fiat’s position is that Alfa needs to retail 500 000 units by 2014 or face the realities of economies of scale in the car industry.
Burdened by the restructuring of Chrysler and the prospect of launching its own small cars (and Alfa Romeo) to the American market soon, Fiat may need all the help it can get.
VW is currently sitting on $22.3bn of cash. These reserves need to finance a strategy that hopes to see the German giant overtake Toyota as the largest car maker in size by 2018.
"As already said by (Chief Executive Sergio) Marchionne, there is no plan to sell the Alfa Romeo brand," a Fiat spokesman is reported to have said on Monday, while VW declined to comment.
Fiat’s public position may be driven by nationalistic fervour (Alfa Romeo is an Italian institution), yet with VW already having acquired Italian design house Giugiaro earlier this month, there seems to be no satifying the German group’s appetite for Italian brands.
Curiously, if Alfa Romeo does come into the VW fold it will leave Seat in a rather unenviable position. The Spanish VW subsidiary has long been the sole underperforming part of VW’s empire and attempts to reposition it as an Alfa Romeo performance brand alternative have failed.
If VW can take hold of Alfa Romeo, Seat may disappear as a brand. After all, if you can have the original, why imitate?