Before Fiat bought Chrysler, the Italians were attractive potential partners to suitors from all over the automotive world. This appeal was not only recognized by Opel, who later withdrew from the alliance and fell back into the General Motors fold. Around that time, Mercedes-Benz seriously considered Fiat for a strategic alliance like the one they've since entered with Renault-Nissan. On numerous occasions, Volkswagen Group put out their feelers, too, but Ferdinand Piech's squad was primarily interested in Alfa Romeo.
Now that Fiat is digesting Chrysler, it has become too big to swallow, and is probably no longer all that tasty either. But this has not diminished VW's appetite for Alfa Romeo. Quite the contrary: the Germans are closely monitoring what is going on in Turin and Detroit, and they are behind closed doors mapping out strategies for a possible acquisition of Alfa. Although Sergio Marchionne has repeatedly insisted that Alfa Romeo is not for sale, Piech is not known for taking "No" as an answer. But what would VW do with yet another brand at a point in time when overcapacity is a serious threat to the European operations of most volume car manufacturers?
"At a glance, buying Alfa may not make much sense," admits a senior VW official. "But done right, it could be a win-win situation for both buyer and seller. At VW, we would use Alfa to replace Seat. Seat does not know what it wants to be. The fragile brand's value now ranks even below Skoda in most markets and the high fixed costs incurred by high-quality VW componentry will lead the Spaniards exactly nowhere. Alfa on the other hand is a much more valuable commodity, a name you can ask more money for. During the transition, there may be no alternative to badge engineering. But the next-generation Alfas would feature a combination of bespoke styling and VW engineering. While the demise of Seat would go almost unnoticed, the arrival of Alfa would have a big impact on the community and on our group."