Alpha Romeo Alive and Kicking In Europe - Will Hop Across The Pond

BOLOGNA, Italy, Dec 5 Jane Barrett writing for Reuters reported that sports car maker Alfa Romeo is selling well against its immediate competitors despite a drop in the number of sleek vehicles rolling out of its showrooms, the head of Fiat SpA's Alfa Romeo business unit said on Thursday.

And there is more growth ahead with a new engine launching Alfa Romeo into the fast-growing diesel market and plans for the maker of the "Spider" sports car to roll into the U.S. market.

Total car sales have fallen about 9 percent in Fiat's key Italian home market this year, but the drops have dragged more heavily in some of the higher-range market segments, where Alfa Romeo models are parked.

"We are keeping our market share, or increasing it, in segments which are shrinking despite our strategy of cutting out unprofitable sales," Daniele Bandiera told Reuters at the Bologna Motor Show.

Earlier this year, Fiat Auto launched a drive to cut low-profit sales to rental companies or via dealers who sell brand new cars for less than full price. The sales chop has accounted for about half of Fiat's fall in Italian market share.

Alfa Romeo sales have fallen almost 14 percent so far this year in Italy, but its market share has remained almost stable at 3.6 percent versus 3.8 in the first 11 months of 2001.

"We have more possibilities for growth with diesel, which is a huge, growing market we weren't in before. With the arrival of our new multi-jet engine, this month we are optimistic about the future," Bandiera said.

Fiat Auto Chief Executive Giancarlo Boschetti recently said Alfa Romeo was making progress towards break-even. Alfa Romeo accounted for about 10 percent of Fiat Auto sales last year in terms of volume but Fiat declined to break out its revenues.

Fiat Auto, which also owns the Lancia marque, is investing 600 million euros a year to 2005 to launch 10 new Alfa Romeo models, pinning its hopes on the brand's sporty cachet to revive slumping sales at group level.

A new version of the Alfa Romeo Spider, the sports car Dustin Hoffman drove in the 1967 film "The Graduate," is due on the market early next year, while in 2005 a new family of Alfa Romeo 156s will be launched in Europe as a preparatory step for a push into the United States.

"We need a couple more months to work out how to distribute most efficiently in the United States because we are not going to set up our own network," said Bandiera, confirming his V-shaped grills would roll onto U.S. highways in 2007.

Most analysts expect Fiat, which has been dragged into the red by Fiat Auto, to take up an option to sell the unit to General Motors Corp. <GM.N> in 2004.

Some Italian politicians and market watchers say Fiat should sell off Fiat and Lancia but fold Alfa Romeo together with its prestigious Ferrari and Maserati brands.

Bandiera declined to comment on the suggestion.