08-23-2010, 11:20 AM | #1 |
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Volkswagen may have an interest in buying Alfa Romeo
A number of news sources are reporting that Volkswagen may have an interest in purchasing the Alfa Romeo brand from Fiat. Here's a link to a report from Reuters - click here
The concept is Volkswagen could purchase the Alfa Romeo brand and kill-off their fledging Seat brand. Essentially the theory is that it would be cheaper and faster for Volkswagen to buy Alfa than it would be to fix Seat. Sources within Fiat indicate the company has no interest in selling the Alfa Romeo brand. Frankly, from Volkswagen's standpoint I think it was a brilliant move to leak this information to the press. As Marchionne prepares to solicit proposals for Fiat franchises in the U.S., Volkswagen sends a signal that the future of Alfa may be in play. A Fiat franchise without Alfa isn't likely to generate much interest. Volkswagen gets to rain on Marchionne's parade and it's all based on rumor and speculation. |
08-23-2010, 12:30 PM | #2 | |
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What if Marchionne orchestrated the leak?....Then that would decrease interest in any Chrysler dealers seeking for a Fiat francise...allowing Marchionne to solicit competitive brands. |
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08-23-2010, 12:38 PM | #3 |
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08-23-2010, 02:15 PM | #4 |
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Nah... devalues Fiat regardless of buyer... Chrysler or other dealer. I'm with X-Man... hurts Marchioness plan to set up Fiat franchises. Maybe Marchionne screwed over VW at some point and time and this is payback... because the timing is about perfect.
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08-23-2010, 03:41 PM | #5 |
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Then maybe all Chrysler Dealers would get the 500 . I just do not see the Fiat Business model working with Alfa maybe out of the picture and with the expense involved . I still say the best set up would be A) Chrysler/Alfa : the car division . B) Dodge : the Minivan/Truck/Suv Division .C) Jeep would be Jeep. The real opportunity would be to take Chrysler upscale to go head to head with Cadillac/Lincoln/Lexus/Acura etc. and let Alfa be the sporty/fuel efficient smaller cars. You could have a set up like Toyota/Lexus ; Honda/Acura; Nissan/Infinity etc. Even Buick is going heads up with Lexus in marketing with the new Buick models and they are going to come out with a new larger Global Park Avenue model to go against the large Euro/Asian sedans.If they sell off Alfa then we could have A) Chrysler/Fiat (Toyota/Scion); B)Dodge; C)Jeep and be set up like this on a Global plan. We need a marque sedan. I am seeing a lot of our customers that use to buy our bigger sedans now buying Lexus;Bmw;Infinity;etc. and all the sales we have lost in the Camry/Altima/Accord area is sicking. Even GM's new business plan goes in this direction and if thing really got tight GM might just have Chevrolet/Buick/Cadillac with GMC being rolled into Chevy Trucks .Even my Sales Rep said that the Ram as a 4th Brand still has the jury out on that move.
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08-23-2010, 06:02 PM | #6 | |
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08-23-2010, 06:30 PM | #7 |
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It wouldn't be in VW's interests to have Fiat competing with them in the North American market as well as the world market. I bet if it's disinformation, it is targeted directly at Marchionne's boondogle in the US
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08-24-2010, 08:18 AM | #8 | |
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That said, I agree with CL that Marchionne wouldn't derive any benefit from leaking news of Volkswagen's interest in Alfa because it would reduce the interest of ALL parties in submitting proposals for a U.S. Fiat dealership. We'll have to see what happens in the coming weeks. If all the doubt and uncertainly about Alfa goes away after the September 22nd deadline for the Chrysler dealers to submit their proposals your theory would be plausible. |
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08-24-2010, 08:29 AM | #9 | |
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With your solution there are four clearly defined brands and 100% of the existing Chrysler dealers derive benefit from the sale of Alfa vehicles. With Marchionne's solution there are six brands that have overlapping vehicles and only 5 - 10% of the existing Chrysler dealers derive any benefit from the sale of Alfa vehicles. Added to that is the insanity that Fiat/Alfa requires a dedicated facility. I would love to hear from anyone who could argue that Marchionne's plan makes more sense than your plan. |
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08-24-2010, 10:10 AM | #10 | |
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nevermind. you win. Somehow, I think Ralph could some it up better. |
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08-24-2010, 10:42 AM | #11 |
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I think you're 100% right and I don't blame Volkswagen for putting up obstacles to slow Marchionne down - it's a strategically smart decision.
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08-24-2010, 10:50 AM | #12 | |
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Take the dedicated Fiat dealer network as an example. Clearly that was Marchionne's plan from day-one he just didn't want to reveal the truth until it was too late to do anything about it. |
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08-30-2010, 12:31 AM | #13 |
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Perhaps there was another reason....
There was an interesting article in The Detroit News concerning the reports about Volkswagen's interest in Alfa Romeo. For the full report - click here
While the report discounted the likelihood that Volkswagen has any real interest in Alfa Romeo it concluded the speculation has renewed focus on Alfa's prospects - creating doubts that work to VW's interests. Bottom line, Alfa's not doing well and it hasn't done well for the past ten years despite Marchionne's efforts to re-launch the brand in 2005. It's estimated that Alfa lost $380 - $500 Million last year and it's lost between $250 - $500 Million per year for the last 10 years. When Marchionne re-launched Alfa in 2005 he hoped to double sales to 300K/year but sales actually fell to 100K in 2008. Marchionne's goals for Alfa are even more lofty now - he plans for 500K by 2014 a 500% increase over Alfa's sales in 2009. (Only 85K of the 500K of Alfa's 2014 sales are expected to come from North America.) If Volkswagen wanted to knock Marchionne off his path, a great way to do it would be to feign interest in Alfa Romeo and have the media re-examine the prospects for the brand. |
08-30-2010, 10:00 AM | #14 |
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Forget Volkswagen, maybe Marchionne needs to worry about China?
Granted it's all just speculation but I thought it was interesting the above article concerning Volkswagen's interest in Alfa Romeo concluded with the suggestion that a Chinese OEM may eventually purchase Fiat - including their controlling interest in Chrysler.
Can you imagine - another new owner for Chrysler? In fairness, I think it's very unlikely but it does give Marchionne one more thing to worry about if his grand plans begin to falter. |
10-05-2010, 02:46 PM | #15 |
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Volkswagen's interest in Alfa Romeo is still in the news...
I thought it was interesting that Volkswagen's interest in Alfa Romeo is still in the news despite the fact Marchionne has repeatedly indicated the brand is not for sale. Here's a link to a recent report in the Financial Times - click here
Perhaps most interesting are the comments from Volkswagen's chairman who hinted he expects Fiat and Alfa will eventually run into trouble and that will put the Alfa brand in play. Maybe I'm naive, but if Marchionne's interest in Chrysler is genuine, why doesn't he sell off Alfa, cancel the plans for a separate dealer network and use the proceeds from the Alfa sale to buy-out the UAW's equity in Chrysler? |
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