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Fiat may sell Ferrari, parts division

by David Zatz on

Analysts believe that Fiat intends to acquire over half of Chrysler, based on the November 12 conference call, according to an article in Automotive News. They also believe Fiat will launch a Ferrari IPO and sell parts maker Magneti Marelli to generate enough cash to acquire a share of Chrysler.

Buying 16% of Chrysler, to raise its stake to 51%, will ironically be more expensive for Fiat than it could be, because Sergio Marchionne is postponing an IPO until the stock has a higher value than it would if made available at present. The launch of an almost completely new line of 2011 cars, with re-engineered midsized and compact cars likely to be launched or previewed in 2012, should also substantially raise Chrysler’s value, making the acquisition more expensive for Fiat, but helping Chrysler to repay the Canadian and U.S. governments and generate working capital.

Marchionne also confirmed that Volkswagen was interested in buying Alfa Romeo, but because the Italian brand figures prominently in Fiat’s and Chrysler’s five year plans, the offer would have to be very attractive.

As Allpar reported earlier, the upcoming Alfa Giulia, which will be based on the LX platform, might be built in either Italy or the United States, with no decision made yet; it will replace the Alfa Romeo 159, and might have a convertible version.

Generally, analysts’ track records for correctly understanding statements in clear language have not been flawless.

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