Marchionne’s biggest dilemma is to sell or not Alfa Romeo to Vw, report says

Article by Christian Andrei, on December 3, 2010

Whether Alfa Romeo would be sold off to Volkswagen is one of the major topics hounding the auto industry today. Last September, Volkswagen's boss Ferdinand Piech implied that it may take over Alfa Romeo but he declined to provide details.

What Piech had emphasized is that VW has the ability to turn around Alfa Romeo and make it a profitable company. Fiat’s head, Sergio Marchionne, was quick to deny that there were talks. He asserted that Fiat wants to keep Alfa Romeo.

However, an Automotive News report disclosed that Sergio Marchionne has actually been in talks with Volkswagen on the Alfa Romeo sale. The report further revealed that the two companies held talks for about four months but that so far, they haven’t come to a decision.

In fact, Marchionne has created a team to manage the case and to make an outline of what to do in two different scenarios, if Fiat chooses to keep Alfa Romeo or if it opts to sell it.

The outcome is not certain but a source disclosed two factors that might influence Marchionne’s decision. One consideration is that Alfa Romeo is having a hard time reaching its 300,000 units annual sales goal. Alfa Romeo affects Fiat's overall figures and there are huge expenses related to the launching of new models.

Within the next few years, five new Alfas are slated to arrive in the market. Another thing is that if Fiat sells Alfa Romeo, it only means that it will be able to expand its alliance with Chrysler in Europe. Fiat would only have to make Dodge available in Europe and offer its models similar to what it does with Alfa Romeo. [via autoweek]

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