Marchionne says once again that Alfa Romeo isn’t for sale, rejects Vw offer

Article by Christian Andrei, on October 25, 2010

Fiat SpA has rejected an offer from Volkswagen AG to buy Alfa Romeo. CEO Sergio Marchionne said that Alfa Romeo isn’t for sale. What this means is that the Italian company’s shareholders will have at least two more years of depressed profit.

Max Warburton, a Sanford C. Bernstein analyst in London, estimates that Fiat’s annual loss for the brand is about 300 million euros ($416 million). He predicts that Fiat will post earnings before interest and taxes this year of 1.77 billion euros, which are pushed up by Maserati and Ferrari sales.

Marchionne states that for the brand to turn a profit, at least 300,000 Alfa Romeos have to be sold in a year. He doesn’t believe that the brand will be able to reach this goal until 2013.

Alfa Romeo, which built its first model in 1910 and was withdrawn from the US in 1995, is Fiat’s only entry in the volume section of the luxury auto market.

Marco Santino, a consultant in Rome at A.T. Kearney, which has worked for Fiat on supply-chain operations, said that Alfa Romeo is the “only possibility for Marchionne to compete in the high-price segment.” Santino said that what Marchionne is up against is a “long-term project” and that there’s no possibility of hitting these targets “in the short run.”

Last month, supervisory board Chairman Ferdinand Piech said that Volkswagen, Europe’s largest carmaker, is interested in buying Alfa Romeo.

In response, Marchionne said that he will rebuild the brand himself by creating new models and entering the US market once again. Shareholders consider Marchionne’s plan to be very costly. [via Bloomberg]

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

More positive news has been pouring in before the year ends. For those who have been waiting to hear the latest word on Toyota 86, we have some great news....
by - December 10, 2016
Hyundai is making the green vehicle race more competitive by offering three powertrain types -- pure electric (EV), hybrid (EV plus combustion engine) and plug-in hybrid (PHEV) – in one...
by - December 9, 2016
Although specs for the new Renault Megane had already surfaced several weeks ago, we didn’t know that the company has cooked up something new. Aside from the 200hp gasoline, Renault‘s...
by - December 9, 2016
For the first time in fifty-eight years, Infiniti registers its first US-Spec Q60 Coupe in Cuba. American products have not been allowed entry into Cuba for six decades. But it...
by - December 9, 2016
Chevrolet has already given out the pricing for some of its 2018 Equinox models. Not only will the new Equinox be available in both the US and Canada, it is...
by - December 9, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries