Fiat Plans to Develop Alfa Romeo Spider in Mazda Venture
Fiat SpA (F) agreed to jointly develop a roadster for its Alfa Romeo brand with Mazda Motor Corp. (7261) as part of a plan to expand the Italian nameplate’s offerings.
The vehicle, based on technology from Mazda’s MX-5, will be sold under both the Alfa Romeo and Mazda brands, the companies said in a statement today. The rear-wheel-drive car will be built at Mazda’s factory in Hiroshima and production for the Italian marque may begin in 2015, according to the statement.
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Mazda Says It Will Jointly Build Sports Car With Italy’s Fiat Scott Eells/Bloomberg
The Mazda Motor Corp. logo is reflected off of the company's CX-5 at the 2012 North American International Auto Show (NAIAS) in Detroit, Michigan, U.S.
The Mazda Motor Corp. logo is reflected off of the company's CX-5 at the 2012 North American International Auto Show (NAIAS) in Detroit, Michigan, U.S. Photographer: Scott Eells/Bloomberg
Fiat Chief Executive Officer Sergio Marchionne is overhauling the maker of the Duetto Spider, made famous by Dustin Hoffman in the film “The Graduate,” with new models including the 4C compact sports car and Giulia sedan. The Giulia will be based on the Dodge Dart platform from Chrysler Group LLC, which Fiat controls. Mazda said today’s agreement doesn’t involve any purchase of stock.
“With the brand image and design from Alfa Romeo and Mazda’s engine technology, the car may be a hit,” said Satoru Takada, a Tokyo-based auto analyst at Toward the Infinite World Inc. “The trend for carmakers is to share technology and work on single joint products without forming a capital alliance, so the likelihood for Mazda and Fiat to buy each other’s shares seems low.”
Fiat fell as much as 10 cents, or 2.6 percent, to 3.77 euros and traded 2.4 percent lower as of 11:20 a.m. in Milan. Mazda rose 0.9 percent to close at 108 yen in Tokyo before the announcement.
Marchionne plans to remake Alfa into a luxury brand to compete with industry leader Bayerische Motoren Werke AG. (BMW) Developing a full range of models for Alfa and boosting sales of the brand outside Europe are crucial to his strategy of lifting combined revenue at Turin, Italy-based Fiat and Chrysler to more than 100 billion euros ($126 billion) by 2014.
Alfa Commitment
“This agreement clearly demonstrates our commitment to Alfa Romeo and the determination to grow it into a truly global brand,” Marchionne said today in the statement. “By partnering with Mazda, we will be cooperating with the recognized leader in compact rear-drive vehicle architectures in order to deliver an exciting and stylish roadster in the Alfa Romeo tradition.”
The preliminary agreement paves the way for Fiat to expand in Asia to counter losses in Europe and reduce dependence on the U.S and Brazil for profit, and may help Mazda increase sales in Europe as it seeks to end four straight years of losses. The two plan to discuss further cooperation in Europe, they said, without elaborating.
Keeping Pace
“It’s a move in the right direction, as Fiat needs to expand in Asia,” Wolfram Mrowetz, chairman of investment firm Alisei SIM in Milan, said today in a phone interview. “Fiat needs new models to keep pace with its biggest competitors.”
Madza and Fiat are not discussing a “capital alliance,” Michiko Terashima, a Mazda spokeswoman said by phone today.
Marchionne has said he’s searching for a third partner after merging with Chrysler to help reduce development costs and boosts sales in fast growing countries. He said in January that carmakers need to consolidate to compete with Volkswagen AG (VOW), which had a market share in Europe of 24 percent in the first four months of this year.
“I doubt how much positive impact it could bring for Mazda’s earnings,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “It is a small scale alliance.”
The Mazda and Alfa Romeo versions of the sports car will be equipped with engines unique to each brand and a final agreement may be signed in the second half of the year, according to the statement.
Ending Losses
Fiat, which owns 58.5 percent of Chrysler, has sought to expand in Asia amid the slump in European demand. Fiat’s loss before interest, taxes and one-time items in the region nearly doubled to 207 million euros in the first quarter. Fiat-Chrysler earned 3 percent of revenue in Asia-Pacific last year, compared with 37 percent in Europe and 45 percent in North America. Asia accounted for 5 percent of operating profit.
Mazda, which produces more than 70 percent of its vehicles in Japan, is counting on fuel-efficient models such as the CX-5 sport-utility vehicle, the first vehicle to be fully fitted with its so-called “SkyActiv” technology, to increase sales and profit after the yen’s appreciation eroded the value of exports.
“Fiat and Mazda just got engaged,” Mrowetz said. “Only the execution of the deal will show if they’ll manage to have a long relationship.”



