Thursday, December 30, 2010

Poll: Should Fiat Cut Loose Alfa Romeo and/or Sell it to Volkswagen?

Like Saab and countless other brands before, Alfa Romeo is at a tipping point. The famed Italian automaker, which once stunned the world with its gorgeous styling and motorsport victories, is now losing an estimate €200 million (US$265 million) per annum. It’s hard to believe that the company that brought us cars like the GTA, the Spider and the 158/159 Alfetta could be reduced to such a sad state of affairs.

Sergio Marchionne, the unwavering CEO of Fiat and its subsidiaries, is determined to turn the ailing automaker around. Meanwhile, Volkswagen is sniffing around for more brands and smells a potential winner in the Milanese company.

There are many arguments for and against selling Alfa Romeo to ze Germans. Here are the ones we’ve covered in our previous article:



  • Alfa Romeo is valued at €1.5 to 2 billion. By selling what equates to their biggest loser, Fiat would emerge virtually debt free.
  • The brand’s dismissal would save Fiat a further €1.5 billion that it would of spent product R&D over the next four years.
  • Fiat would also save €200 million a year in losses.
  • Alfa’s departure could potentially allow for Dodge to return to Europe as Fiat’s sporty brand, with Fiat remaining the first choice for entry level buyers and Lancia / Chrysler for those seeking something a little more upmarket.
  • Volkswagen has worked wonders with Bentley, Seat and Bugatti. Can you think of a better mother hen for one of Italy’s finest?

The Case Against Selling Alfa Romeo

  • If Fiat can survive until 2014, analysts predict it will emerge with no debt and fatter profit margins. And that’s with Alfa Romeo.
  • Fiat could net the same amount of lira by selling three of its OEM suppliers: Magneti Marelli, Comau and Teksid.
  • After Fiat’s expected 2014 recovery, the Milanese automaker is expected to account for 10% of Fiat’s sales.
  • Fiat has plans to share platforms between Alfa Romeo, Chrysler and Jeep, helping all three brands. Without the platform sharing, Chrysler and Jeep will continue struggle and Fiat’s push into the Chinese and Russian markets will be delayed.
  • With Fiat focusing primarily on small cars, it would have to develop new mid-sized and large car models to fill the gap left by the departing Alfa.

So there you have it: five points for and five points against. All that’s left now is to cast your vote, so get voting!
By Tristan Hankins

__________________________________POLL__________________________________

Should Fiat Sell Alfa Romeo to the VW Group?

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