Alfa Romeo may return to N.America within 2 years

TORONTO, Feb 12, 2010; John McCrank writing for Reuters reported that Alfa Romeo is likely to return to North America by 2012 after a 15-year hiatus, the head of Fiat SpA, the company that makes the classic Italian sports car, said on Friday.

The brand was last sold in the U.S. market in 1995, and Fiat has pushed back its return several times.

"I'm a lot more confident now ... that Alfa Romeo will reconstitute a product offering that is acceptable globally, and more in particular in the United States and Canada," Fiat Chief Executive Sergio Marchionne said in Toronto.

"There is a strong likelihood that the brand will be back here within the next 24 months."

Marchionne said it is possible that Canada may play a roll in manufacturing the Alfa Romeo, made famous in North American popular culture in the 1967 movie "The Graduate".

Fiat, which also owns the luxury brands Maserati and Abarth, took control of Alfa Romeo in 1986.

Fiat took over Chrysler less than a year ago after the troubled U.S. automaker was forced into bankruptcy in the midst of a recession and dropping market share.

Chrysler's U.S. market share for 2007 was 12.9 percent when it was bought by Cerberus. It dropped to 11 percent for 2008 and then 8.9 percent for 2009.

Marchionne hinted that Chrysler could afford to lose a little bit more share, preferring to sell cars profitably than holding on to money-losing sales.

"I think the starting point for Chrysler is smaller than people remember. It's that simple."

He said an 8 percent market share, including fleet sales, would be a good starting point for the company to begin rebuilding itself.

"The minute you start pushing numbers like 9, 9.5 or 10 percent, certainly double-digit market share, it's unnatural."

Chrysler's difficult financial position before the Fiat takeover made investing in new product development difficult and now the company has little in the way of new offerings in the pipeline to attract customers.

Marchionne said he wished he could bring more products to the market faster, but that the Chrysler could afford to wait to make sure it gets the job done right.

"We have more than 20 nameplates on the road," he said. "We have more nameplates than most (Asian automakers) and they have a bigger market share than we do."

"So there is a fundamental issue about how successful these particular nameplates have been in their particular segments. To be fair, I think we've executed poorly -- we've inherited the execution -- so give time for the organization to come back in an deal with that problem effectively."

SYMPATHETIC TO TOYOTA, BUT STILL A COMPETITOR

As the dust from the recession settles for Chrysler and the other Detroit-based automakers, one of their biggest competitors, Toyota Motor Corp (7203.T), is grappling with a new set of problems.

The world's biggest carmaker and No. 1 in the U.S. market last year, Toyota has recalled more than 8.5 million vehicles globally after a string of safety-related concerns.

Marchionne said he has sympathy for Toyota in its troubles, but that in the end, they are the competition.

"It is seismic in nature," he said. "It's part of the question of what has been the essence of the Toyota brand which is quality and reliability."

He said that kind of situation under normal circumstances takes a long time to repair and that there were many Chrysler products that he thought would satisfy consumers while uncertainty surrounds Toyota.

"So to the extent that they are going through this process of reestablishing their credibility, I think Chrysler and the other competitors will try to fill in the void," he said.

Outside of North America, Fiat signed a deal with the Russian government this week to form a 2.4 billion euro ($3.3 billion) joint venture with Russian carmaker Sollers.

Marchionne said Chrysler may have the opportunity to play a limited role in the deal.

"Based on what I know today, the only option that would ever make sense in the Russian market is the Jeep brand," he said.

Additional reporting by David Bailey in Detroit; editing by Frank McGurty