Alfa Romeo revs up flights of fancy (News Feature)

By Eva Tasche and Katie Kahle Aug 28, 2010, 3:06 GMT

Wolfsburg/Turin - Is it just a flirt or serious intentions? When they hear the name Alfa Romeo, the adrenalin flows in the veins of VW executives.

But whether Volkswagen is really going after the Italian marque is uncertain. And besides, the Fiat subsidiary so far has flatly denied any intentions of selling.

CEO Martin Winterkorn called the Italian sports car maker 'a dream marque' some time ago. An unnamed 'high-ranking' VW executive went even further by saying, 'If such a gem were to be had, we would not hesitate long,' according to a trade publication.

But from the corporate headquarters in Wolfsburg and Turin there has been only one response: No comment.

Imagination has taken flights of fancy additionally through Volkswagen's takeover of the Italian design company Italdesign. However, VW has worked together with Italdesign for decades. And Italdesign was up for sale.

Company founder Giorgetto Giugiaro designed the first VW Golf (marketed globally as the VW Rabbit) and the legendary Scirocco, among others. Also, VW head designer Walter de Silva is Italian, as is VW marketing manager Luca de Meo, who used to in charge of Alfa at Fiat.

But at no point were there any indications in Wolfsburg of contacts, talks or indeed negotiations with Fiat concerning the prestigious subsidiary Alfa.

Media reports consistently spoke of interest, but not of concrete steps.

And the purchase of Alfa by VW would not really help, according to car industry expert Stefan Bratzel of the Bergisch Gladbach School of Business and Economics. He says that, in view of the integration of Porsche and numerous other projects which VW currently is tackling, buying Alfa makes little sense for VW.

Says Bratzel, 'It would be too much for VW.'

While Volkswagen wants to become the world's biggest carmaker by 2018, integrating Porsche into the corporate structure, a task which will take the next several years, means that VW's portfolio of 10 marques would already include one iconic sports car.

There are additional tasks in the reconfiguration of the MAN and Scania truck lines. And there are recurring rumours that VW will likely increase its 20 per cent stake in Suzuki, the Japanese compact car and motorbike manufacturer.

Alfa Romeo is indeed legendary - but the carmaker's economic situation is less than a dream. So there have been reports of a weak model policy, sales problems and lack of future-oriented perspectives.

In addition, Fiat CEO Sergio Marchionne apparently has his own plans for this tradition-rich marque. And those plans do not include selling Alfa Romeo, he has said repeatedly in rejecting media reports.

Just last April, in releasing Fiat's four-year goals, Marchionne unveiled plans for a US market push via Chrysler with Alfa models with new design impetus by 2012.

And by 2014, he added, the goal is to sell 500,000 Alfa Romeos - up sharply from 100,000 last year.

Just last year the Italians took the wheel at Chrysler in the wake of the US car maker's insolvency. Fiat currently holds 20 per cent of the US manufacturer, with the long term option of a majority hold.

The Fiat group includes Fiat, Alfa Romeo and Lancia as well as sports car manufacturers Ferrari and Maserati and also the truck line Iveco and construction vehicles Case and New Holland along with numerous components manufacturers.