What Will Happen If Volkswagen Buy Alfa Romeo?

I love Alfa Romeo. I’ve had four of them over the years. A Sprint, two 16V Alfa 33’s and my current GTV6. I hope to own more Alfa’s in the future, too. The 4C is now on my in-the-future list. I’m invested in this company.

So it’s with some degree of trepidation that I approach a persisting story, one with both a dark cloud and a silver lining attached to it.

First, though, there was another story through the week that prompted my concern. Fiat launched a new vehicle in Australia, called the Freemont. You can see a picture of it at the top of this story. Those of you reading this from the United States might recognise that vehicle. Where you live, it’s called the Journey and it has a Dodge badge on the front.

Here’s the Journey. Compare that with the car at the top.

Dodge-Journey

This, of course, is some of the fruit of the new Fiat/Chrysler relationship. Some sharing of engines and architectures is to be expected, I suppose, but this is flat-out re-badging in a style not seen since the bad old days of pre-bankruptcy GM.

All this makes me wonder about Fiat, the company that owns my beloved Alfa Romeo.

Alfa Romeo currently has the rather unexciting MiTo and the much more interesting Giulietta in its range. The brand’s recent history includes a series of absolutely beautiful cars that weren’t quite able to drive as good as they looked. A driver’s brand devoid of a true driver’s car.

Fiat make all the right noises about being dedicated to an Alfa Romeo resurgence and the new Alfa Romeo 4C is the first evidence of that, creepy headlights and all. Fiat are promising a reintroduction of Alfa Romeo to the United States, a new Spider that will be developed in conjunction with Mazda’s new MX-5 and, as is seemingly compulsory these days, a premium SUV.

On the other hand, Fiat are basically just holding on thanks to Chrysler’s new-found success in the US. European sales have tanked. Fiat need a couple of home runs and as much as I love Alfa Romeo, Fiat are taking the brand upscale and a newly upscale Alfa isn’t the lifeline that Fiat needs. One can easily get the impression that Fiat are fattening the Alfa cow just prior to slaughter.

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All of that leads us to a story that just won’t go away, despite public denials from people connected to the companies involved – the talk that maybe Volkswagen buy Alfa Romeo. The rumours first surfaced a few years ago and the story is still hanging around, covered again on several prominent motoring websites in just the last few weeks. Here’s one excerpt, from Ward’s Auto:

TURIN – Alfa Romeo is at the core of top-level negotiations between Audi and Fiat and might be near to a sale, reliable sources here and in Ingolstadt, Germany, say.

Sources close to both Fiat CEO Sergio Marchionne and Audi CEO Rupert Stadler confirm the two are in talks over a major deal.

The top subject reportedly involves the sale of Alfa, but this time not only the brand but Fiat’s Pomigliano assembly plant also is on the table.

I do worry for the future of Alfa Romeo under its current owner. I worry because of Fiat’s short-sighted badge engineering as well as decisions like shutting down the Alfa Romeo museum, as they did a few years ago.

Fiat took Alfa Romeo off the Italian government’s hands in the mid 1980s. The cars have become more modern since then, but they’ve also become a bit more generic. Most have had beautiful styling, but then most have also been front-wheel drive.

The Alfa strategy also seems a little bit scatter-brained. The MiTo and Giulietta have their fans but they’re entry-level premium European cars. The Giulietta, especially, is a fine car but neither are banging down the door of the specialist or luxury car segments. Fiat seem to want to spark an upscale revival for Alfa, a focusing of the brand’s identity that’ll start with a car that looks like a true driver’s car – the 4C. Upscale Italian sportiness….. hasn’t Fiat already got Maserati for that? I know Maserati is more of a true luxury brand, but then Fiat did just announce a new Maserati Ghibli, priced down to fit under the Quattroporte at a point intended to make Maserati more accessible.

Alfa and Maserati are approaching one another, it seems.

So you could say I’m not opposed to a sale of Alfa Romeo, even if it’s to a non-Italian company like Volkswagen. But then you have to ask the question – are Volkswagen the right company to take Alfa Romeo into the future?

Here’s a graphic of the car brands currently owned by the Volkswagen Group. Well, nearly all of them. You can add Porsche into this picture, too, now.

VolkswagenGroupBrands

There’s no doubting the success of the Volkswagen Group. They are currently the most profitable car company in the world and will overtake GM as the #2 car company in the world based on sales. Toyota won’t be far away in the #1 slot, either.

Their cars are all very well regarded with the possible exception of Seat, which is a rare VW failure so far. Skoda are making good quality, good value small cars and family cars. VW themselves range from the bland to the sporting. Porsche are Porsche. Audi have taken a place at or near the top of the Teutonic table. Lamborghini and Bugatti are hallmarks in the supercar and hypercar segments.

But here’s the thing that rubs me the wrong way.

The Volkswagen Group have made a success out of all of these brands but aside from Lamborghini, and Bugatti, is there anything in the range that has been built to really inspire? To me, the rest of the brands scream …….. competence. And I guess you could say that Lamborghini and Bugatti scream extreme competence.

What I’m wondering is whether or not Volkswagen have got the ability to build passion into their cars, because that’s what Alfa Romeo has traditionally had and that’s what Alfa Romeo needs to become great once again. That mad focus on one particular aspect of a vehicle, even at the cost of incompetence somewhere else. Will a German-owned Alfa Romeo allow poor ergonomics in order to have the car look just right, if need be? Will they make you skew your number plate to one side in order to preserve the symmetry of a heart-shaped grille? A great Alfa has flaws that accuentate the great things about it. Sad, but true.

Bottom line: Fiat are making a few dumb moves and they might need to sell Alfa Romeo to survive and focus. Can Volkswagen make an Alfa Romeo that a passionate person can truly fall in love with?

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My tip: BMW could.

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29 Comments

  1. That Fiat Freemont looks somewhat plain and is 2WD only. I have never understood people buying a non 4WD SUV, but they do seem to be quite popular here. To me, the only point of driving an SUV would be for 4WD off-road capability.

    As for Alfa, I have had my Guilietta for a fortnight now and I love it. Great car and I would say, on current form, better than the 93 it has replaced. It really feels like Alfa have got the car just right. Give me a few weeks and if you are interested Swade I will do a few pictures and a quick right up for you.

    1. Hmmm…. I wonder why it’s 2WD only? At the price Swade quoted for Oz, my Dodge Journey (company car) is equipped with full-time AWD.

      Either way, the Journey/Freemont is not a true SUV. It’s not a body-on-frame truck construction, that is. It is in the category that Car and Driver now calls ‘Non-Minivan’. It is a people/grocery hauler with some sporting mixed in rather than the other way around.

      1. You got it right, Eggs. To answer DRM’s question, there are 2WD SUVs (full and mids-size) specifically because in the US now seem to like them better than minivans, even though they end up being able to haul less cargo than most minivans.

  2. I suspect you’re going to suggest that BMW owning Alfa Romeo because it would give mini front wheel drive owners a place to go when they outgrow a mini, while BMW can stick to the rear drive cars and hence not dilute their brand.

    What VW bring to the table is as you say competence, and probably the best chassises in the business. I think they could make some fun Alfa cars, particularly if they let the people who make the GTi run it.

    Saying all that I think Alfa will stay around with Fiat for a few years longer. The big question is how people adapt to the Alfa/Mazda roadster. I can’t wait to see it.

    The Dodge Journey is a bit of a sleeper car in the US. Its surprisingly nice to drive, its comfortable, and it can carry a ton of stuff, and its a bit tougher than a standard minivan, so I could see why Fiat wants to import it into Australia. I think it will do very well. (I think badge engineering wouldn’t work if Dodge was in the Oz market and already selling it there).

    1. Paul,

      The reason I think BMW would make a good owner for Alfa (should one be needed) is that their brands are true to their roots. The Rolls Royce has presence, elegance and the height of luxury. BMW are still making a mix of solid and sporting cars. And Mini is as fun as the old one.

      If BMW were to do Alfa, they’d do it right, I think.

      I agree with you that Alfa is likely to stay with Fiat. I think Fiat have good plans for them and I hope they come to fruition. I just get scared when I see stuff like the Freemont. Capable as the Journey might be, it just doesn’t suit my idea of a Fiat at all and seeing companies adopt completely unsuited models makes me wonder about their strategy.

      I like Fiat, deep down. I wish them well. I hope they don’t have to divest Alfa at all.

  3. If I’m allowed to think about Alfa+Audi long enough, I could come up with some really great cars and some really ‘competent’ and sterile ones.

    I loved driving my previous company car, the Audi A4. There were very few flaws, and if you put a foot in it, it moved like a scared cat. I could easily become an Audi enthusiast.

    Having lived with the Audi for a while, I can see your point about the ‘German efficiency’ that for some may rob the experience of visceral thrill. I am not one of those people, I found. The Audi grew on me as time went by. Granted, had the car been mine, I would have tuned the exhaust note a bit, and I certainly would have put some stickier rubber on it, but that would have been it. The shape of the car wasn’t exactly inspiring, but neither are BMWs, Volvos or Mercedes these days.

    Audi technology and Alfa-Romeo Italianness (if I can invent a word) could be a great match. I prefer to look on the bright side, I guess.

  4. The Freemont is a good family car for the price. It may be marketed as an SUV, but it’s a minivan under the skin. I know better than to criticize this type of car. I grew-up in the back of the family wagon, and lots of my friends drive them and love them.

    I don’t foresee Fiat selling Alfa. They need something to slot between Fiat and Maserati. That’s the A4/3 Series/C-Class/S60 market, and it’s one of the few segments that combines sales volume and profit margin.
    Then again, for all I know, they could flip Alfa to VW and then re-launch Lancia in the premium segment.

  5. Very interesting question.

    Short answer:

    Good things, probably.

    Long answer:

    Badge engineering is just one of those (unpleasant) facts of life. Opels are still ‘Vauxhalls’ in the UK and the list of other examples is a long one. But people ought to be getting away from it.

    So here is point #1 in favour of VW. The Skoda Superb used to be a badge-engineered LWB Passat, but not any more. Plus Seats, although they are clearly based on old Audis, still look different inside and out. So the signs are that VW would not do that with Alfa, whereas Fiat seem to be susceptible and could get increasingly desperate. Fiat Multipla rebadged as an Alfa anyone?

    Point #2 in favour of a sale to VW: the trouble at the moment is that Alfas do look great, but their reliability is a laughing stock. I know a lady of half Italian descent who just loved the look and drive of her 2010 Alfa coupe but had to get rid of it after two years because it was never out of the workshop with serious electrical/electronic faults. She still wanted a ‘statement’ car, so got a MINI instead. If VW can give Alfas their famed reliability, then it would be an improvement.

    But wait. A number of VW group cars have had shocking reliability if the surveys are to be believed, with Audi being among the worst. I have family members and friends who have had Skoda and here I think the surveys mask a truth. Skoda drivers tend to say “Yeah, great value for money car, very reliable…” then they reveal to you that actually their electric windows don’t work or open randomly, their doors leak, an electronic module had to be replaced for £500 for reasons that were never fully explained… etc. On the other hand I have a family member with a newish 2010 Audi and they love it. I suppose many of the criticisms of Audi reliability come from their new-cars customer base; some of whom might be harshly characterised as corporate blowhards who throw their toys out the pram if they hear so much as a faint rattle. So I guess all this is somewhat inconclusive…

    Point #3 in favour of VW. They are not going out of business or facing a crisis any time soon, plus they have demonstrated that they are a multinational that can nurture and nourish the distinctive identities of their different brands. Thinking of Spyker and before that GM, then I think all us Saab nuts can say Amen to that.

    However:

    The trouble is that VW are German and all their core brands are either German or in the neighbourhood. They would have to preserve enough of the Italian-ness of Alfa for it to work. Share too much in terms of engines, platforms, components, styling and headquarters/personnel and you no longer have the kind of Alfa that you love so much.

    What are the bets VW would know Alfa must be allowed to do its own thing? And how much of its own thing could it realistically be allowed to do. A unique platform is surely a no way, Jose. VW are the masters of platform-sharing. So that leaves engines and all the other stuff.

    Hmmm, ponder, ponder…

  6. Talking of VW reliability, we’ve had one expensive repair on our Rabbit/Golf (leaky head gasket $1800 as it included the 50,000 mile service), apart from that its been very reliable over the last six years. The Tiguan had its ipod cable replaced but after nearly three years that’s been it.

    Any vehicle made after 2008 should be very reliable now anyhow. Its one of the biggest problems car manufacturers face: people aren’t replacing their cars as often as they used to.

  7. As has been said; badge engineering is a no-no. In the UK where we have not had Lancias on sale for years now we now see a few (very few) Ypsilons and Deltas badged as Chryslers on the roads! Badge engineering is IMHO, the last desperate measure of a car company that has lost its way.
    I have an Alfa Romeo Mito and contrary to what Swade said, it is a very interesting car. It drives well, looks great, offers high levels of equipment and while not an uncommon sight on our roads, it is no-where near as common as the bloody Mini which is a car that is being done to death with all of its different guises; the new one being the Mini Paceman! WTF is that! A slightly larger more sportier looking car than the hatch. What is the point in doing that? I thought that was what the coupe was meant to be!
    These rumours have been doing the rounds for years; a bit like all the hyperbole that has been coming out of Sergio Marchionnes mouth for years. Alfa SUV anyone? Meant to be in the showrooms now yet no sign of it!
    I don’t know if Alfa Romeo would be better off with VW or Audi (not BMW please!) but I do know one thing; it can’t continue to plod along like it is at the moment. It needs action, not words or it needs selling!

    1. Agree: the Mito is a nice wee car.
      Agree: the MINI Paceman is a silly, silly car.
      But worse is the MINI Countryman, a whale of an insult to Alex Issigonis.

  8. Alfa Romeo are no strangers to badge engineering, the worst being the Alfa Arna/Datsun Cherry Europe that I’m sure both companies would love to forget! Then in the 90s Alfas were based on the equivalent size FIAt/Lancia such as the Alfa 155/Lancia Dedra/FIAT Tempra and so it went on including the Type 4 cars of course which added Saab to the mix (9000).

    Even now, the Guiletta we all love so much is a re-shaped, re-badged FIAT Bravo as was the Alfa 155 before which was the same as the Bravo/Brava twins.

    I’m sure VW Group could do just as well as that, if not better! 😀

  9. You are right about the Arna! A totally horrible car. However, the Fiats/Alfas/Lancias et al were not ‘badge engineered’. They were models that were based on floor plans/chassis/engine sharing. they did not simply take an Alfa 155 and put a Lancia or Fiat badge on it as they are now doing with Chryslers, Lancias and Fiats.
    Also, the Saab 9000 shared technology with Lancia, Alfa and Fiat but was not a badge swap model. In fact, the 1.9 diesel engine that was developed between Saab and Fiat was so much better than GM’s lousy 2.2 unit that Saab dropped the 2.2 and only offered the 1.9 unit.
    Platform and technology sharing/development has been going on for years and is far more desirable than simply sticking a badge from one brand onto another brands models.

    1. I agree, but having owned Dedras, Tempras and 155s I would say the differences between them were mostly styling. A LOT of components were shared and the driving “feeling” was very simiiar.

      Basically the Tempra was the “bread and butter” version, the Dedra trimmed up to be a more “luxury” one and the Alfa had “sporty” pretensions. Much as Toyota used to do with Lexus, merely trimming and tweaking larger Toyotas to create an impression of a new, luxurious model.

      To be fair, it worked and still does.

    2. I like the 2.2 engine! They dropped it because it was old tech by 2005, not being common rail among other things.

      The 9000/Croma/Thema was a very interesting project. They are basically the same car, and yet the 9000 seems to have a range of features from the safety cage to the seats that are unique.

  10. Mmh, when I look at the companies Volkswagen owns, I believe, with the only exception of Lamborghini maybe, that somehow, they always managed to somehow keep and condense the spirit of each brand. (that at least holds for the German perception of these spirits, your mileage may vary). They only never had a brand like Alfa to nurture. Most of the brands are more about competence and a down-to-earth approach. Alfa was mostly a bit over the top. We just can’t tell what they would be able to do with Alfa.

    Buying the Naples factory with its bad reputation would however not be a smart move. It would imho be much better to reactivate the old Milano factory in Arese where also the presently closed museum is located.

    And well, it can’t get any worse than now (see above SUV).

  11. All,

    Sniff Petrol is usually a site for mocking the car industry’s peculiarities, but recently, Mr Porter has taken to spending a week with a car and writing a review on it. It’s still injected with humour, but as is the case with good funny people, the humour has a way of bring out the essence of truth.

    Anyway, he’s just published A Week With The Skoda Octavia and it spells out my VW apprehensions quite nicely.

    Recommended reading in the context of this article.

  12. Volkswagen already has enough brands or even too many? That’s why Saab would’ve been not much better off with VW than it was with GM. The same probably goes for Alfa Romeo. Whilst some Volkswagen brands remain prominent, Alfa could end up like Seat and almost fade away.

  13. Actually, for those of us not eating and breathing the auto biz, the sort of badge engineering Fiat are doing makes a lot of sense.

    When GM were selling Buicks, Oldsmobiles, Chevys and Pontiacs to Americans that looked almost exactly alike (the pinacle was in the 80s), that was dumb. Consumers could see easily that these cars were the same.

    Now, you’d have to be familiar with not only what was for sale in your country, but also what was for sale in other countries. Given that Toyota makes a mint selling Camry based Lexus ES (itself sold, until recently, as the Toyota Windom in Japan) to people that have no idea of their cars’ origins, I think it’s a good business assumption that not many people are going to put 2 and 2 together.

    Heck, even VW does this. The Seat Exeo is an Audi A4 (albeit the last gen car) save the grille and a few trim changes.

    1. Yes, even vw is doing this with seat. But, as it seems, seat is the only failing brand within vw….I don’t think badge engeneering is a good thing. It doesn’t add value to customers. And in the long run, it makes great harm to the brand by telling there customers: “if you buy this, you get old stuff noone else is buying anymore under the original brand.”

  14. Mallthus: Problem here is that in particular Alfa drivers are not like this. They would somehow smell the fake, or they are just better informed. Like most Saab drivers, I guess.

  15. Peter: Do you happen to know where the Dodo is? There. Numbers for the Chrysler 300 renamed a Lancia are down in Germany, not up, like one would expect for a “new” model.

    1. No I don’t. I was just stepping outside the box because Lancia like Alfa has always been a niche car but more obscure. I just wanted to see their latest models on line and was shocked to see that they are re-badged Chryslers. One model even had the nose of of the now defunct PT Cruiser!

  16. It’s Lancia that VW should buy. Fiat is clueless with it, probably dislikes it. Hasn’t marketed it properly. Lancia needs quality, which Fiat never provide. And one bum design — the technically superb Thesis — has knocked Lancia out of the lux market altogether, as surely as these daft rebadged Chryslers will.
    Fiat has multiple problems, mainly stemming from having to keep a huge workforce leading to overproduction of indifferent models, albeit on some good platforms. Here in France we’ve seen the Freemont in the showrooms since November, not yet a single one on the road! (OK it’s been a harsh winter; even so…)
    Alfas are now lovely, but still fault-prone. VW could fix that, but it’s a lot to chew off. Lancia is a smaller morsel, although still the ruling elite’s limo of choice, so there’s a nationalistic obstacle too. My 16-year-old Kappa is like a new car, with build quality rated higher than many Mercs, and lacks only ESP, keyless ignition and those pricey comms toys Fiat (and others) think we all want. Mainly the young do, and they don’t have enough cash in sufficient numbers to keep that show on the road.
    VW does have a limo, perhaps rarely seen outside Germany.

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