Rumors Fiat Chrysler Reportedly Considering Spinning Off Maserati and Alfa Romeo

[Centurion]

If this is true then it's bad news. Hardly and manufacturer is in acquisition mode except Geely. Understandably, the proceeds from the selling two brands could go towards developing an EV platform and drivetrain. Without competitive EV products in 2020-2025 I can see FCA sales taking a steep drop and the conglomerate descend into bankruptcy.


Fiat Chrysler Reportedly Considering Spinning Off Maserati and Alfa Romeo

Fiat Chrysler Automobiles NV is considering options including a plan to spin off the upscale Maserati and Alfa Romeo brands as well as its components operations, according to people familiar with the discussions.

The moves would focus the Italian-American company on mass-market cars to make Fiat Chrysler more attractive for a potential combination with a competitor, said the people who asked not to be identified because the deliberations are private. The luxury-car operations could be worth as much as 7 billion euros ($8.3 billion), while Magneti Marelli and other parts businesses are valued at up to 5 billion euros, analysts estimate.

Discussions among executives are progressing, with several options still under consideration, including just separating one or more of the component units, which also include Teksid and Comau, the people said. A final decision may not be made until early 2018 and the timing of carrying out the transactions remains uncertain, they said. Fiat Chrysler declined to comment.

The plan is also meant to unlock value for the Agnelli family and other shareholders as the company continues to underperform peers, the people said. Goldman Sachs Group Inc. estimates that Fiat Chrysler’s businesses are worth about 50 billion euros on their own, double the group’s current enterprise value of 24.5 billion euros.

Bloomberg

 

[anti-VAG]

They made that with Ferrari. Who runs Ferrari? FCA. So expect similar with this. And maybe merger with Ferrari.

Or option B. Alfa and Maser as listed companies but still as a part of FCA.

 

[SKY]

They made that with Ferrari. Who runs Ferrari? FCA. So expect similar with this. And maybe merger with Ferrari.

Or option B. Alfa and Maser as listed companies but still as a part of FCA.

Oh my... Imagine Alfa owned by the German power. By VAG.

 

[anti-VAG]

Oh my... Imagine Alfa owned by the German power. By VAG.

Clone attacks?

 

[Wunderkind]

VAG can't afford Maserati and Alfa Romeo now.

The irrational side of my brain says Daimler should buy these brands and make something out of them.

But I really cannot see either being easy to integrate into any of the current global automobile groups.

 

[tristatez28lt1]

I think it would make sense. These companies need some cash to stay competitive. Could be a masterful move from Marchionne.

 

[Centurion]

Or option B. Alfa and Maser as listed companies but still as a part of FCA.

Listing Ferrari made sense because of their astronomical licensing revenue, powerful brands and the fact that the cars share virtually nothing with the rest of FCA. Alfa and Maserati wouldn't fare well on the stockmarket as they will be highly dependent on FCA for economic of scale, shared corporate functions, procurement purchasing power etc.

 

[Deleted member 1071]

Oh my... Imagine Alfa owned by the German power. By VAG.

I seem to recall that "Darth" Piech focused his sights on both Alfa-Romeo and Maserati back in 2003-2004, contemplating merging the resources of the Audi division with the two Italian marques. The then-new Quattroportes' transaxle underpinnings were an object of interest for VAG.

 

[SCOTT27]

I seem to recall that "Darth" Piech focused his sights on both Alfa-Romeo and Maserati back in 2003-2004, contemplating merging the resources of the Audi division with the two Italian marques. The then-new Quattroportes' transaxle underpinnings were an object of interest for VAG.

Emperor Piech. He was no henchman with a very strong smoking habit.
No I agree VW have ruled themselves out at the moment especially during Diesel Gate. I reached out to media colleagues about VWs reduction impact for the IAA? It's due to Diesel Gate and the fact that many countries in Europe have already filed suit so spending multi-million euros is not going to go down well. Even if they are all new EV concepts.
But yes we will see the new Bentley GT there amongst other new concepts and models from VW Group. The scale may be reduced. But the importance has not been.
The IAA will be under more scrutiny as before. In 2015 they got rid of press day and every VW executive went back to their positions before the revelations broke. But expect protests from environment groups etc all under the cloud of increasing terrorism across Europe.

 

[Serpens]

VAG can't afford Maserati and Alfa Romeo now.

The irrational side of my brain says Daimler should buy these brands and make something out of them.

But I really cannot see either being easy to integrate into any of the current global automobile groups.

I don't think the Daimler board has an appetite for any acquisitions so soon after DaimlerChrysler.

 

[Wunderkind]

I don't think the Daimler board has an appetite for any acquisitions so soon after DaimlerChrysler.

That suggestion came from the irrational side of my brain.

 

[Matski]

Well, at least if Alfa went to the Chinese, the build quality would improve

Seriously though, if you were the CEO of one of the other major players, what would be the attraction of either Alfa Romeo, or Maserati?

If I was VAG, I could see a fit for Maserati in between Audi and Lamborghini, using any of the groups impressive sets of underpinnings. Given that Alfa is very dependent on Italian domestic sales I think keeping Alfa as a more targeted brand - such as Skoda or SEAT, could work - but it would have to be more of a boutique brand, perhaps offering a Polo based hatch, an A4 based saloon, and a TT based roadster....

... but as has been pointed out, VAG probably aren't looking to grow their portfolio now.

I think the other place that it could fit, is at JLR, they could spin off all the Jag models into Alfa models quite easily... whether or not TATA could afford it who knows?


Fun to speculate, but I don't honestly see FCA getting rid of either brand.

 

[anti-VAG]

Given that Alfa is very dependent on Italian domestic sales

Traditionally 30% of Alfa's EU sales come in Italy. I would not call that very dependent on domestic sales.

 

[anti-VAG]

Listing Ferrari made sense because of their astronomical licensing revenue, powerful brands and the fact that the cars share virtually nothing with the rest of FCA. Alfa and Maserati wouldn't fare well on the stockmarket as they will be highly dependent on FCA for economic of scale, shared corporate functions, procurement purchasing power etc.

I didn't say separate company. I said listed company. That's different. I my thought they would still be a part of FCA unlike Ferrari.

Earlier Jeep sales, now Alfa-Maser spin-off. All came from reporters which are trying to spin Sergio's words from conference calls. For example let's take a look at Q2 2017 conference call transcripts.


George Galliers - Evercore ISI

Great. And then the third question I had was just when we look at the improvement you're seeing at Maserati, as I think about the end of next year, I guess, Maserati and Alfa Romeo combined could look like a 250,000-unit per annum company, with around €12 billion of revenue, €1 billion of EBIT, a margin in excess of 8%. That sounds like a pretty healthy and respectable standalone OEM and one which could attract a good multiple, given the growth profile it will have seen. Are there any platform or powertrain constraints, which could make a separation of those two as a unit unviable?

Sergio Marchionne - Fiat Chrysler Automobiles NV

I'm going to answer your question by answering the last portion of what you said, which is that there are no restrictions – there are no structural, industrial or engineering restrictions for the separation of Alfa and Maserati. That means nothing. Because it does – that's not an acknowledgement of the fact that either it can be done or would be done.

There's a statement, which, I think, is still in the press release about the fact that we have – or in the analyst deck about the fact that we're holding an Investors Day in the first half of 2018. And I realize that there's been a relatively large amount of excitement out there caused by initiatives both on this autonomous driving front, on the electrification, on this whole notion of separation of businesses.

And I think that given the fact that we're bringing to conclusion a five-year plan and so far, to the best of my knowledge, we're on track to achieve its objectives and all its elements, including net debt by the end of next year.

We thought it was – that it was proper that we sort of update the market again on what we consider to be the next five years of FCA 2014 – sorry, 2018 to 2022. And we intend doing that within the first semester of 2018, notwithstanding the fact that I will not be here when that cycle continues.

The reason why we're doing this is because although we are now – we started doing this at the end of 2016, we're doing it today, we're doing it next year, we're not committing capital that we will – that will not see any economic results until well after the completion of the 2018 plan. And I think it seems sort of improper that we keep on committing capital and reveal these numbers on a quarterly basis without giving an indication of what it is that we're working on.


I'll give you a couple of broad sort of indications of where we are today in terms of the delineation of the post 2018 FCA. The first one and I've mentioned this in passing and other occasions about the fact that there's nothing that will prevent an OEM from engaging in the type of development work that Tesla has done so far. We have been – as you well know, we have been reluctant to embrace that avenue until we saw a clear – a path forward. I think we're now in a position to acknowledge at least one of our brands and in particular Maserati will, when it completes the development of its next two models effectively switch all of its portfolio to electrification.

And as these products come up for renewal post 2019, it will start launching vehicles, which are all electric and which will embody, I think, what we consider to be state-of-the-art technology. It's an integral part of the development of the Group and I think it's an integral part of a broader strategy on electrification, which will see more than half of its fleet – by the time we hit the conclusion of the plan in 2022, it will see more than half of its fleet incorporated in electrification.

Some of that money has been spent already, some of it will be spent within 2017 and 2018 and some of it will be spent as we launch products in the 2019 to 2022 timeframe. I think it is important that we reserve judgment on what you suggested as being a possible avenue. Until we hear that story in the first half of next year, the only thing I can tell you for sure is that when we look at the portfolio of activities that FCA carries out, there are things, which are associated with automotive but are fundamentally non-OEM activities.

And when we have looked at the development of the sector over the last two or three years, we have come to the conclusion that the differences in valuation between what we currently achieve as an OEM and some of the activities they carryout including Marelli, no longer justify aggregation. And I think that when we speak to you next year in the first half after having discussed this with the board at some length, it is my view that we will show you a much clearer portfolio of OEM activities by the end of 2018, and I think that forms an integral part of the plan going out to 2022.

But other than that, I will not speak about anything else and I will – really will not discuss anything else in terms of disaggregation of activities within the Group. There are some things, which have been inside the Group for a number of years, and which we have worked on now in terms of profitability over the last two or three in a very intensive way, and which in all likelihood required us to see the light of day on their own merits and away from something which appears to be not as loved by the markets as traditional OEMs. So we need to reserve all this until the first half of 2018.

Fiat Chrysler Automobiles NV (FCAU) Q2 2017 Results - Earnings Call Transcript | Seeking Alpha

 

[Matski]

Traditionally 30% of Alfa's EU sales come in Italy. I would not call that very dependent on domestic sales.

Ah okay, I thought it was more than that, where is its biggest market?

 

[CrunchSlaughtered]

Ah okay, I thought it was more than that, where is its biggest market?

San Marino

 

[tristatez28lt1]

China will be everybody's biggest market at one point if it isn't already.

 

[Cashmere]

One step closer to a debt-free car business that is getting ready to be sold.

FCA to review potential Magneti Marelli spinoff in Q2


Fiat Chrysler Automobiles said on Wednesday that in the second quarter it would review the possible spinoff of its Magneti Marelli unit.

Last month FCA CEO Sergio Marchionne said he had recommended to the company's board that the automaker spin off the maker of components for lighting, engines, electronics, suspension and exhausts, to shareholders by the end of 2018.

"There is no assurance that the review of the potential separation of Magneti Marelli will result in a final determination to enter into any such transaction or that such transaction, if commenced, will be completed," the automaker said in a statement posted on its website. "FCA does not intend to make any further disclosures concerning these matters until a definitive determination is made."

Magneti Marelli, based in Milan, ranks No. 28 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $8.23 billion in its 2016 fiscal year.

Link: FCA to review potential Magneti Marelli spinoff in Q2

 

[Centurion]

What a rubbish decision. The cars most in need of replacements will now be cancelled. Crossover might be cash cow but hatchbacks serve a big purpose in introducing people to a brand and building loyalty ahead of move into a bigger car.

I was looking forward to a MiTo with the driving finesse of a Giulia.

Alfa Romeo Mito to be axed in early 2019 | Autocar

Fiat Punto taken off sale after 13 years | Autocar

 

[tristatez28lt1]

But I also heard this promising rumor:

The new Giulietta is coming as RWD built on the Giulia platform and as a small SUV.