Alfa Romeo hopes to hit 300,000 units/yr by 2005

GENEVA, March 4, 2003; Jane Barrett writing for Reuters reported that Alfa Romeo hopes to ramp up its car sales by 50 percent by 2005 as a raft of fresh models hits the road, the head of the Fiat-owned (Milan:FIA.MI - News) brand said on Tuesday.

Alfa's crisis-ridden parent Fiat on Friday posted a record yearly loss of 4.26 billion euros ($4.65 billion) and is banking on 20 new models, about half of them Alfas, to pull its car arm back to profitability.

Alfa chief Daniele Bandiera said Alfa sales totalled about 190,000 in 2002 and should tick up to 200,000 this year before taking off as the new models are launched.

"I'm really positive about the way things are going. We want to get to more than 300,000 unit sales a year in 2005, which will be helped by new models," Bandiera told reporters at the Geneva auto show.

Alfa Romeo accounts for about 10 percent of Fiat Auto's volume sales.

Bandiera said Alfa still planned to return its V-shaped grilles to the lucrative U.S. market in 2007 but would not be drawn as to whether it would depend on the help of General Motors .

GM bought 20 percent of Fiat Auto -- which groups the Fiat, Alfa Romeo and Lancia brands -- in 2000 and Alfa's U.S. relaunch is mentioned many times in the agreement.

Fiat has a "put" option that allows it to force GM to buy the other 80 percent of Fiat Auto from next year.

"We do not want to distribute (Alfa) directly ourselves and will rely on existing networks. GM has a huge network but so do other companies," Bandiera said.

Fiat, once Europe's biggest carmaker, was forced to sell assets and lay off about 15,000 workers last year as sales of its outdated models slumped and its car division bled cash.

The company now plans to shore up its car arm's finances with a five billion-euro capital increase.

Its shares fell to an 18-year low on Tuesday after credit rating agency Fitch Ratings (News) said it cut the industrial group's senior unsecured debt rating to "junk".

Despite the turmoil, Fiat's automaking arm is pressing ahead with plans to rejuvenate its line-up and on Tuesday it unveiled two new Fiat-brand cars.

The Gingo will replace the aged Panda and the Seicento while the Idea will launch Fiat into the mini-MPV segment.

Deputy Chairman Alessandro Barberis called the new models "a concrete presentation of our promise", which includes plans to invest 2.5 billion euros a year in research and development.

"We believe in the Fiat Auto plan. I don't have a crystal ball and I can't give forecasts but today is an important day in the evolution of Fiat," Barberis said.