There is one Golden rule in business which says that you should never reveil your real intentions especially when it is about something you really want. It has been a constant since negotiation has been part of society. People, companies and countries have been doing it in order to get whatever they want. Car industry is not the exception. Although the big deals became popular about 20 years ago, all car makers that still exist had to negociate to grow. Nowadays the fact of closing a deal means to survive.
Three years ago, Fiat Group Automobiles signed a deal with American government to get a part of troubled Chrysler in exchange of technological transfer. This smart play allowed Italians to finally access to the American market with an important market share. Meanwhile Fiat’s board was dealing with another problem: Lancia and Alfa Romeo’s sales. Both companies have been loosing market share in Europe during the last ten years. Lancia, strongly dependant on Italian market, got its first life vest from Chrysler. But Alfa Romeo was in a worse situation: even though is less unpopular than Lanchia in the rest of Europe, its model range was being reduced as the demand was dropping dramatically. But ‘suddenly’ appeared Volkswagen.
Current financial crisis has been the scenario for three different situations: those car makers that finally died, Saab, Pontiac, Mercury; those struggling to survive, most; and those car manufacturers making useful of it, VW. Germans from Volkswagen keep a sales growth despite the deep crisis in its native Europe. This good moment allowed Mr. Ferdinand Piech, chairman of the supervisory board of Volkswagen Group, to look for more brands to increase its size and power. What Mr. Piech forgot was the golden rule: he made public his intentions to take over Alfa Romeo. And he has not done it once: more than three or four times he has repeated VW wants Alfa to be part of it.
Behind this public statements, there is for sure his intention to destabilize Alfa, its immediate future (coming plans and models) and generate a debate among Italians. Is it convenient to sell the Biscione to Germans? Can’t really Fiat take it to the road of success? some people say that if it is necessary for the brand to survive, the sale to Germans should be done. Other think Alfa is Italian and must continue being so. Personally I think Fiat guys ce la fanno: they can and must do it. This is not the first big crisis they have had. Fiat people are really prepared to face problems: two world wars, oil crisis, quality problems in late 90s and the begining of 00s. All of those periods have been tests they have been able to performed quite well. Besides the new scenario for Fiat after Chrysler’s takes over, offers an excellent perspective for Alfa as it opens them world’s second largest market, while they keep working in other fronts such as Asia. Fiat has the know how of making awesome shapes and great technologies to project excellent Alfas. They have the factories to do it. And the most important: the people.
And they must do it. Fiat-Chrysler has to demonstrate the world they can deal with this situation of taking Alfa to become a global profitable brand. It’s a matter of telling the industry that capability and will are part of their people. It is a message to people in which they say is just a matter of time. The problem is that time is short and expensive, and therefore they must hurry: Alfa has just two models on production and several plans (return to the US market, futury sporty cars, SUV, etc.) but they need to become real as soon as possible as Germans are gaining the world, while Koreans keep pushing and Japanese defend their empire.
Alfa Romeo has to be part of Fiat Group because Fiat belongs to Alfa as Alfa belongs to Fiat. They need each other. Alfa’s potential of offering a big range of sporty Italian models is a big opportunity to conquer not only America but the Middle East, the rising rich China and Russia. Alfa is part of Italy and therefore it must stay in Italy making use of what only Italians can do: the ‘Made in Italy’ touch with the passion they have for making cars.