VW : NO Interest In Fiat Beyond Audi/Maserati Plan

FRANKFURT, Dec 11, 2002; Reuters reports that Volkswagen AG said today it had no interest in Italy's struggling Fiat beyond a possible technical co-operation between its Audi luxury unit and the Italian firm's Maserati marque.

"There is nothing more to it than that and nothing less," Volkswagen spokesman Dirk Grosse-Leege said.

Political and financial sources in Italy said on Tuesday Fiat was "close to an agreement" with Volkswagen on making the German company a partner in a possible luxury division comprising its Ferrari, Maserati and Alfa Romeo brands.

The Fiat group is struggling to coax its cash-bleeding core auto business back into profit by 2004, the first year it can sell its 80 percent stake in the unit to carmaking giant General Motors Corp.

The "put" option had been seen as a safety belt securing Fiat's future, but sources said Milanese investment bank Mediobanca, which holds a minority stake in Ferrari, had concocted an alternative plan to create a luxury brand partnership with Volkswagen.

Industry experts said anything beyond a technical link between Audi and Maserati would make little sense for VW, whose new Chief Executive Bernd Pischetsrieder has made it one of his goals to cut out overlap between the group's already large brand portfolio.

Volkswagen's wide range of brands, acquired under former CEO Ferdinand Piech, already include Italian sportscar maker Lamborghini, a key Ferrari rival, as well as Seat, a brand which is seen as a competitor to Alfa Romeo. It also owns Skoda, which along with the core VW brand competes directly with Fiat's lower ranges.

"A technical cooperation between Audi and Maserati would be a nice thing to have. But the main result of anything further would make no sense for VW," one German auto analyst said.

"VW would gain nothing apart from a barrage of criticism that Pischetsrieder was following his predecessor's ways."

Piech was criticised by some analysts for his acquisition spree and his "platform strategy", which saved production costs by building several models on the same basic framework, but diluted the identity of some of the group's brands.

Both Audi and Maserati confirmed on Tuesday they were in talks about a possible technical cooperation, but declined to give further details.

Analysts said they expected any deal to involve Audi supplying components and technology to Maserati.