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Alfa Delaying U.S. Return to at Least 2013

Marchionne, meanwhile, confirms Fiat upping Chrysler stake to 30% "in a matter of days."

by on Apr.11, 2011

The Alfa-Romeo Giulia is the centerpiece of the Italian brand's planned U.S. revival.

The long-awaited return of Alfa Romeo to the U.S. market has apparently been delayed once again.

The Italian maker, a subsidiary of the Italian auto giant Fiat S.p.A. was due to return to American shores late next year, but that has now been pushed back to 2013, sources confirmed, the blame apparently going to CEO Sergio Marchionne, who feels the brand’s products won’t be ready for the trans-Atlantic jump.

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Separately, Marchionne, who also serves as chief executive of Chrysler, confirms a report by TheDetroitBureau.com, earlier this month, that Fiat will soon increase its stake in its U.S. affiliate to 30%.  Eventually, the Italian company is expected to push that to a majority 51% share.

Alfa Romeo pulled out of the U.S. market two decades ago, suffering from quality problems and a steady decline in sales.  The maker has made several comeback attempts since then – two years ago launching the low-volume import of the Alfa 8C supercar.  A full comeback to the American market is seen as a critical step for the brand, which has been struggling for a number of years.

In fact, Volkswagen Chairman Ferdinand Piech has suggested his company would like to buy Alfa from Fiat.  Marchionne has repeatedly said the sporty brand is not for sale, but its long-term viability is likely to hinge on expanding global demand, especially in the U.S., traditionally the world’s largest luxury car market.

The resurrection of an American dealer network has been pinned on the arrival of the small Alfa Romeo Giulia.  But Marchionne is apparently not happy with the design of the U.S. version nor – critically – two models to be sold under the Chrysler and Dodge brands that will share the same platform, powertrains and key subsystems as the Giulia, according to a report in Automotive News.

The replacements for the Chrysler 200 and Dodge Avenger models now are also being delayed until sometime in 2013 or later.

Delaying the Giulia line is a serious problem for Alfa in Europe as well as the U.S. because the brand recently dropped key products including the Spider convertible and GT Coupe.

Marchionne envisions a close alliance between the various Fiat and Chrysler brands, going forward, so a problem for one division will likely impact a number of other marques.

Several Chrysler products will soon go on sale in Europe under Fiat’s Lancia brand, meanwhile, the recently-redesigned Jeep Grand Cherokee will soon provide the foundation for an all-new luxury SUV to be sold under the Alfa badge.

To further cement ties between the two companies, Fiat is rushing to clear a series of hurdles set out by the White House following Chrysler’s 2009 bankruptcy.  Following its emergence from Chapter 11 protection, a 20% stake in Chrysler was given to Fiat.  It recently increased that to 25%.  And in an interview at Fiat headquarters in Turin, Italy, today, Marchionne said it is only “a matter of days” before that is increased to 30%.

(For the earlier story on TheDetroitBureau.com, Click Here.)

The next target will be 35%.  And, ultimately, when Chrysler’s government debts are paid off, Fiat could increase its holdings to 51%.  That is considered a likely move before Chrysler’s planned IPO.  Marchionne cautioned, at the Fiat shareholders meeting, that the public stock offering may now be delayed until 2012.  He had earlier said it was likely to take place during “the second half of 2011.”

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