Marchionne needs at least 2 years to make Alfa Romeo profitable, as VW wants to takeover brand

Alfa Romeo 8C Competizione

Exactly two months ago, Volkswagen vocally showed their interest into purchasing Alfa Romeo from Fiat SpA. Shortly after that, at the 2010 Paris Motor Show, Volkswagen AG Chairman Ferdinand Piech said that he has his sights set on Alfa Romeo.

Marchionne later responded saying that he has no intention of selling Alfa and said “Let them wait. “If someone comes with 1 billion euros ($1.4 billion)”¦ But I am joking, I have no intention at all of selling Alfa.”

Today, Bloomberg reported that it will take Marchionne at least two more years of depressed profits for him to turn around the brand. Fiat SpA is currently losing about $416 million a year on the brand, according to estimates by Max Warburton, a Sanford C. Bernstein analyst in London.

Marchionne said he needs to sell around 300,000 units of Alfa Romeo a year to have the brand become profitable and doesn’t expect to reach that target until 2013. He plans on rebuilding the brand himself by adding new models and reentering the U.S. Shareholders say his plan will be expensive.

– By: Omar Rana

Source: Bloomberg