The Italian carmaker faces new hazards due to potential delays to its two main strategies – relaunching its upmarket Alfa Romeo brand and taking full control of U.S. unit Chrysler.

And in a last minute move that could add to investor uncertainty, Fiat boss Sergio Marchionne cancelled his appearances at the Frankfurt car show on the eve of the event, due to “last minute unforeseen business commitments.” Also, he did not attend – as it was planned – the Ferrari Formula 1 home event in Monza this weekend.

Signs of life in even some of the long-suffering southern European economies have raised hopes that demand might finally start to pick up next year, and Fiat responded to the economic crisis by announcing new models for Alfa Romeo in a bid to grab a bigger slice of the more robust and higher-margin luxury car market, both in Europe and particularly Asia and the United States. It also aims to take full control of its profitable U.S. unit Chrysler to gain guaranteed and quick access to the cash flow and technology it needs to compete in a global market.

Now, sources familiar to the matter, however, say plans to start building the main models in the new Alfa Romeo range in Italy next year are facing delays. Also, the agreement to buy out Chrysler’s minority shareholder has become hostage to the outcome of a battle in a U.S. court, which could push the deal back to 2015.

“The two drivers of this story are Alfa and the Chrysler merger, and we’ve had very little news flow in recent months,” said a fund manager who owns Fiat stock, declining to be named. “I am expecting the speed of investment to pick up from now on, because if you want to have an adequate pipeline for next year you need to get moving now.”

Fiat’s stands at this month’s Frankfurt car show will be short of new products, while mass market competitors will grab the limelight; also, Marchionne has yet to sign off investment in the plant expected to build the likely biggest sellers of the new Alfa Romeo range, the executive E-Segment and the mid-sized Giulia, putting a question mark over whether the models will hit the showrooms next year as planned.

Via Reuters


Please enter your comment!
Please enter your name here