Ferdinand Piech has finally made it official – in Paris last night, the VW Chairman told reporters that he wants to make Alfa Romeo the German giant’s thirteenth brand, and is targeting a deal being struck to acquire the century-old Italian sports name in two years’ time.

While rumours have swirled for years about VW’s interest in Alfa Romeo, and potential deals have gone a fair way down the line in the past before fizzling, this is the first time that the German carmaker has openly discussed its ongoing interest. Indeed, VW attempted to turn its Spanish SEAT brand into an Alfa competitor after previously failing to prise the Milanese marquee from Fiat’s grasp, and poached its top designer Walter de’Silva to push it towards their sports-oriented market space, a strategy that never paid off.

Last night Piech was open when asked directly about the swirling rumours surrounding VW and Alfa Romeo, but expected to see nothing happening for a couple of years. “We are patient and have time,” he said in comments reported by Reuters news agency. “You won’t hear anything though for the next two years.”

Fiat Group never wanted Alfa Romeo, but bought it in 1986 to prevent Ford from acquiring it and stop the U.S. carmaker from gaining restricted Italian factory capacity for its own products. A deal with Ford had already been struck before Fiat moved, with that agreement being ripped up as a consequence of the Italian giant’s manoeuvrings. The result, over the ensuing quarter of a century, has seen a dilution of Alfa Romeo, with constant brand confusion, regular repositioning, a never-ending revolving door of CEOs, and a lack of understanding of its core values, all adding up to ensure a near-constant sales decline. During the last two years, sales have barely tipped the 100,000 mark, despite the brand being subjected to one of Fiat CEO Sergio Marchionne’s regular volume ‘targets’, in Alfa’s case 300,000 units by 2010. The latest, and even more fanciful target, is for 500,000 units by the middle of the decade, while a U.S. relaunch has been a constantly ‘on-off’ proposition since before Marchionne became CEO. A recent sign of Alfa Romeo’s gradual downgrade within Fiat Group importance was the appointment of Harald J. Wester as CEO. Already one of Fiat’s busiest senior managers, the German is the Group’s Chief Technology Officer, as well as holding the roles of Maserati and Abarth CEO. Another recent idea to be quietly forgotten, and one that vividly captures the lack of understanding of the sports brand within Fiat, was a plan to tie Alfa Romeo up with the Chrysler Group’s Dodge brand, in a similar way to that in which its sister brand, Lancia, has been aligned with the Chrysler nameplate.

Piech made a thinly-veiled reference to the chaotic nature of the Fiat Group’s stewardship of Alfa Romeo in his comments last night. “Alfa is the one brand with the biggest potential for improvement,” he was quoted as saying by Reuters. He also joked in reference to a comment made a year ago when he said that a “dozen was easier to remember than ten”, referring to VW’s current portfolio of ten brands, saying with a smile last night, “Thirteen is my lucky number.”

He also made reference to the SEAT brand, which VW has been unable to make successful. “SEAT would be to Alfa Romeo what Skoda is to Volkswagen,” he said to reporters in Paris. Aligning the two brands would allow VW to quickly integrate and rebuild Alfa Romeo into a full-liner in the possibility of Fiat selling it only the nameplate. Joining the VW Group would open the door to huge technology resources for Alfa Romeo, particularly from the Audi division, as well as Audi/Lamborghini platforms for high-performance models.

For Fiat Group, set to be split up within months and which is struggling at present to find the funding to renew an ageing model range, refinance debt and take up an optional controlling stake in Chrysler Group, the sale of the Alfa Romeo nameplate would raise valuable cash as well as ending the overlap with sister FGA brand Lancia. When times are tough at Fiat, a Ferrari IPO always gets a mention, and this spectre has been again mooted in the last week. While most carmakers have been rationalising their brand portfolios, Marchionne has been acquiring them – even creating them, in last autumn’s division of Chrysler Group’s Dodge division into Dodge and Ram brands. However, in the back of Fiat management’s mind would be the likely return to sales success that Alfa Romeo would find in Italy under VW ownership, which could adversely impact their own volumes.

© 2010 Interfuture Media/Italiaspeed