Why Volkswagen cruising Alfa Romeo ?
For five months now, the Chairman of the Board of Directors of Volkswagen, Ferdinand Piech, spam the communication of the FIAT group around the brand Alfa Romeo. Since the beginning of 2011, Sergio Marchionne, the president of the FIAT Group says that the Italian brand is not for sale, but for how long and why VW is targeting an Italian brand?
The acceleration of Ferdinand Piech’s statements about the Alfa Roméo brand is seen during the first half of March 2011. The strong man of the VW Group said on the sidelines of the Geneva Motor Show, that in the next 5 years, the German company could increase Alfa Romeo’s sales to 400,000 sales per year (4 times more than today). A few days later, Piech said after Marchionne’s umpteenth refusal, “Volkswagen has time.”
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Rumor says VW has already done a proposal of 350 million euros to buy Alfa Romeo. But why this aggressive strategy around the Italian brand?
Several assumptions to this, but the main remains structural and branding development. Today, the VW brand is the center of the range. Skoda represents a cheaper alternative to having access to VW quality, while SEAT allows to have a vehicle more stylized than German classicism. So far the equation is performing. A strategy that could be well used by AUDI in the future.
Indeed, Alfa Romeo and Audi are, on the principle of more or less direct rivals. What the VW project around the Italian brand has no interest at first glance. However, if AUDI has worked its style in recent years, this German design does not satisfy everyone. Alfa Romeo can therefore become the equivalent for the brand to the other rings, what SEAT is to Volkswagen: a dynamic, aggressive Italian design with German technology and finish. The perfect alchemy according to Piech.
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But, while VW logic, with its two satellite brands, is followed by AUDI, there remains another brand to acquire. A brand to offer AUDI quality for cheaper. At the moment, there is no indication that Ferdinand Piech has a mark in the viewfinder. SAAB, recently once again owned by a Dutch investment fund, could be a target of choice. The DNA between the Swedish brand and AUDI is common (was the SAAB 92 of 1948 not equipped with a 2cyl DKW, historic ancestor of the four-ring brand?). The future will tell us.
Now one thing is certain, the VW group has a vision on the premium automotive sector, in order to declare the AUDI know-how on other brands, to increase its profitability and especially its sales in order to become within 10 years the leader of global automotive groups.
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