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The Two Futures of Alfa Romeo

Historic Italian Marque is facing either sale to Audi or global growth

It is possible that Alfa Romeo could be sold in the next few months

Conflicting stories are emerging about the future of Alfa RomeoAlfa RomeoItaly, 1910 > present108 models
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. The brand is telling the media that it is prepping for a global sales push that will have it adding models and expanding into the US, but rumors are circulating that FiatFiatItaly, 1899 > present159 models
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will sell the brand to finance a complete purchase of ChryslerChryslerUnited States of America, 1925 > present70 models
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.

Sale

The rumors about Audi's sale began when Ward's Auto broke the story of AudiAudiGermany, 1909 > present83 models
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CEO Rupert Stadler and Fiat CEO Sergio Marchionne reportedly met to discuss the possible sale. The Pomigliano factory could also be part of the deal.

Audi's reason to buy Alfa is unknown. It already owns LamborghiniLamborghiniItaly, 1963 > present32 models
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, Ducati and ItaldesignItaldesignItaly, 1968 > present25 models
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, but VolkswagenVolkswagenGermany, 1938 > present98 models
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Group's appears to have a constant desire to buy more brands. However, Fiat as multiple reasons to sell Alfa Romeo.

First, Fiat desperately wants to buy the remaining 41.5% of shares of Chrysler from the United Autoworkers medical fund, known as VEBA, but the sale is tied up in court with Fiat and VEBA disputing the price of the stock. Fiat believes it should be sold at what it was worth when it bought the initial shares in 2009, but VEBA wants them sold based on the current value of Chrysler. The price is currently in arbitration in a Delaware court and a ruling is expected in the next month.

If Fiat could raise a significant amount of extra money quickly, it could conceivably make an offer to VEBA to buy the remaining shares and skip the arbitration, which may not find in its favor. Fiat would be losing Alfa Romeo but gaining Chrysler and all of its brands.

Second, if the Audi decides to accept Pomigliano as part of the deal, it will remove production capacity from Fiat, which it is desperately trying to shed. It seems unlikely that Audi would accept a 50-year-old auto factory as part of a deal for a brand, but if it are desperate enough, it is possible.

Audi, Fiat and Alfa Romeo have all declined to comment on the rumor.

No Sale

If a sale does not go through, Alfa Romeo does have a contingency plan. It believes that it can triple annual sales to 300,000 units to adding new models and expanding into North America. Right now, it only offers its cars in 5% of the global auto market. After the US, it plans to deepen ties in Russia and the Middle East.

To relaunch itself in the US, Alfa Romeo will show the 4CAlfa Romeo 4CItaly, 2013 > present1055 photos
at the LA Auto Show in November and have it on sale shortly after. It is already planning a version with a targa roof to be launched about a year later.