Fiat CEO Marchionne: Sporty Alfa brand won’t be sold, but must prove its mettle to survive

Fiat CEO: Alfa Romeo brand not for sale

DETROIT — Fiat CEO Sergio Marchionne said Monday he has no intention of selling the Alfa Romeo brand, but made clear the maker of sporty cars needs to prove its mettle in 2010.

Analysts have suggested Marchionne may be preparing to sell Alfa, citing statements by the Fiat CEO that a product freeze of the sporty premium brand was under review. Fiat strongly denied Alfa was on the block, and it is against Marchionne’s style of promoting brand identity to let a strong, well-known nameplate go even if its performance is below expectations.

“It is not for sale,” Marchionne told reporters at the Detroit auto show. But he said of the Fiat brands, Alfa is the one that has the biggest issues.

But Marchionne, who is also CEO of Chrysler since Fiat took a controlling 20-percent stake last year, said Alfa cannot live off its proud history alone. Alfa, founded in 1910, was long the car to beat in international auto sports and still inspires great brand loyalty.

“We need to sell cars, not talk about history,” Marchionne said.

Marchionne said Alfa is in a difficult market competing with German luxury sedans and conceded that it has failed to execute well against its objectives. The brand’s future is expected to be laid out in detail in the first quarter when Fiat’s 2010-2014 business plan is presented.

Bernstein analyst Max Warburton, in a report speculating a sale, noted that Marchionne had hoped to double Alfa Romeo sales to 300,000 units through new product and a focus on new dealers when he relaunched the brand in 2005. But Alfa sales in 2008 were a disappointing 108,000 units.

“Even adjusting for the recession, Alfa has fallen short,” Warburton wrote.

Fiat does not break out Alfa numbers, but Warburton estimated that Alfa’s annual revenues at about euro3.3 billion (about $4.75 billion at current exchange rates), based on the average unit sales from 2000-08 of 165,676.

The Alfa range currently includes the MiTo, the brand’s first small car built on the Punto platform which has appealed to first-time Alfa buyers, as well as the 159 sedan. It is planning to launch the Giulietta — a replacement for the 147 hatchback — this year, a critical test of the brand’s ability to recover.

Marchionne, has long planned to relaunch the Alfa brand in the United States, where the image of Dustin Hoffman racing in an Alfa Spider to stop his girlfriend from marriage in “The Graduate” is seared into popular memory. But he has not yet said which models.

Marchionne told Automotive News last year that he is weighing whether to freeze investment, or whether the alliance with Chrylser could give the marquee a rebirth by using Chrylser platforms to replace the aging Alfa 159 sedan and wagon and the discontinued 166 flagship sedan.

“Certainly the availability of D and E segment (platforms) in the United States which are capable of being Alfa Romeoized is there. We need to look at the economics of that opportunity,” Marchionne told the industry publication, but ruled out an Alfa-Dodge merger.

Colleen Barry reported from Milan.