TURIN – Fiat-Chrysler CEO Sergio Marchionne has decided to turn Alfa Romeo into a stand-alone company -- like Maserati and Ferrari -- as part of his latest plan to revive the struggling brand, people familiar with the matter told Automotive News Europe.
Alfa will become stand-alone company, sources say
Alfa currently is part of Fiat Group Automobiles S.p.A., alongside the core Fiat marque, upscale Lancia brand, Fiat Professional commercial vans and the Abarth performance subbrand.
Sources said Marchionne will announce Alfa's new status when he unveils his new strategy for Fiat-Chrysler on May 6.
Alfa will become a stand-alone legal entity within Fiat-Chrysler with a publicly disclosed profit and loss statement. "Marchionne needs to make Alfa’s P&L clearly visible to make this new relaunch attempt into a credible business proposition," one of the sources said.
Marchionne replied "no comment" when asked by ANE whether Alfa would become an independent entity within Fiat.
Turning Alfa Romeo into a global brand is one of the cornerstones of the CEO’s plan to bring Fiat's money-losing European automotive operations back to profit by mid-decade.
The stakes are high: a successful re-launch of languishing Alfa would solidify Marchionne’s legacy as a top auto executive as well as secure the economic well-being of the world’s seventh-largest automaker and its 226,000 employees worldwide.
Fiat plans to develop a new line of rear-wheel-drive sedans and SUVs to bolster Alfa Romeo and take on premium carmakers such as BMW, ANE reported in December. The models will start to hit the market in 2016. High-end versions of the cars will be equipped with engines developed by Ferrari.
Fourth Alfa plan
Marchionne's new plan for Alfa – his fourth since he joined Fiat in June 2004 – has the same goal as the one he introduced for sister automaker Maserati: move the brand upscale to compete head-to-head with premium German automakers.

The Giulietta is Alfa's best-seller, accounting for more than 70% of the brand's global sales in 2013.
Alfa, which has not made a profit during Marchionne’s 10-year tenure at Fiat, will focus on developing premium vehicles to be exported worldwide from Italy’s under-used Fiat factories.
Alfa has continued to wither as re-launch plans continually missed targets. Last year, Alfa’s global deliveries tumbled 56 percent to 74,000 cars, a level not seen since the late 1960s.
Alfa Romeo CEO Harald Wester, who is also Fiat-Chrysler chief technical officer, as well as CEO of Abarth and Maserati, would run Alfa as a stand-alone unit, just like he does with Maserati. Last year, with a 10.3 percent operating margin on revenues, Maserati was Fiat-Chrysler’s second most profitable subsidiary after Ferrari, which reported a 15.6 percent operating margin. On a consolidated basis, Fiat-Chrysler had a 3.4 percent operating margin, company figures show.
Profits from Ferrari and Maserati contributed 470 million euros to Fiat’s 2.97 billion euro operating profit last year. Maserati’s recent success is expected to be a blueprint for what Fiat plans for Alfa.
Boost Italian output
Alfa’s growth would help fill unused capacity at Fiat's Italian factories, a primary source of the manufacturer's losses in Europe of 520 million euros last year.
Marchionne expects Alfa Romeo to anchor his strategy to build upscale cars in Italy for export worldwide, leading to a return to profit in Europe, including Africa and the Middle East.
Six new models are planned for Alfa: a compact SUV and mid-sized sedan that will be assembled at Fiat's Cassino factory near Rome; a large sedan and a large SUV planned for Fiat’s Mirafiori plant in Turin, sources told ANE. Alfa also plans a large coupe and a two seat roadster, that will be produced in Italy.
The top versions of these vehicles will have V-6 gasoline engines, which are variants of powertrains Ferrari developed for Maserati that were adapted by Alfa engineers. The engine will likely be produced at sites in Pratola Serra or Termoli in southern Italy, sources said.
Alfa will also use in its future models the new Pratola Serra-built 1.75-liter four-cylinder turbocharged gasoline direct-injection unit that debuted in the limited-edition 4C coupe.
Diesel engines for Alfa will be built in Pratola Serra as well as by VM Motori, a Fiat-owned subsidiary in Cento, Italy, which already builds engines for Maserati and Jeep.
"Alfa Romeos have to be produced in Italy with an Italian powertrain," Marchionne said last month at the Geneva auto show, where the brand debuted the spider version of the 4C. "Some things belong to a place, and Alfa belongs to Italy."
The spinoff into a stand-alone unit likely signals Marchionne’s intention to make Alfa’s future progress visible but, some critics say, could also be read as the first practical step toward selling it to the Volkswagen Group.
Volkswagen Group Supervisory Board Chairman Ferdinand Piech has publicly stated that he is interested in purchasing Alfa. Marchionne has said several times that he does not plan to sell Alfa, and least of all to VW.
Alfa to Modena?
Under the new plan sources say Alfa’s headquarters may move from Turin to Modena, where Maserati is based. Marchionne said there were no relocation plans for Alfa when asked about the potential shift.
To broaden its reach, Fiat’s new plan calls for Alfa Romeo models to be sold through Jeep's 1,700 dealers outside Europe and North America, giving it a distribution network that better competes with BMW's 3,200 sales outlets worldwide, sources said. Last year, 90 percent of Alfas were sold in Europe.
The move is based on the idea that Alfa Romeo and Jeep brands appeal to consumers seeking alternatives to mainstream competitors and can co-exist because there's little potential that Jeep SUVs and performance-oriented Alfa Romeo cars will cannibalize each other.
"The strategy to mix SUVs and sporty sedans in the same showroom makes sense," Ian Fletcher, an analyst with market researcher IHS Automotive in London told Bloomberg. "But success can't be taken for granted."
The new models and the linkup with Jeep and Ferrari may not be quite enough. IHS forecasts Alfa Romeo sales peaking in 2017 at 243,000 cars, 19 percent below Marchionne's goal of 300,000 units originally set for this year. Still, that would be triple last year's sales and the highest deliveries in more than 10 years.
The company will need to invest at least 5 billion euros to fund the first part of a fully fledged Alfa relaunch, Massimo Vecchio, a financial analyst at Mediobanca Securities in Milan told ANE.
Investors are keen to hear on May 6 how Fiat will finance the spending necessary to make Alfa Romeo a global brand.
After completing in January the acquisition of Chrysler Group, Fiat’s net industrial debt should have reached or surpassed 10 billion euros from 6.65 billion at the end of last year, analysts predict. On May 6 Fiat-Chrysler will also report its first-quarter results as well as an updated debt figure.
Jennifer Clark and Bloomberg contributed to this report