FCA Rumored to Sell Alfa Romeo and Maserati to Pay Off Debt

Alfa Romeo Giulia Quadrifoglio 11 photos
Photo: Dragos Savu for Alfa Romeo Romania
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Running a big automotive group isn’t exactly as easy as some may think it is. Fiat Chrysler Automobiles knows this best, especially now that the company is almost $7 billion in net debt.
FCA has been bleeding money for quite a while now through many of its brands. Fiat, for example, doesn’t have anything going for it except for the 500 and 500X. Lancia doesn’t actually exist anymore unless you’re an Italian in the market for a Ypsilon. Alfa Romeo is far from paying off its investment for the core piece of its renascence: the $1 billion Giorgio vehicle platform.

The American side of FCA doesn’t fare too good either. Chrysler is, just as ever, kept alive on artificial life support, Ram Truck has a lot to catch up with Ford and General Motors, while Dodge could do better in many segments. The crown jewel of Fiat Chrysler, as you might have singled out, is the Jeep brand.

At the end of the day, however, FCA is troubled in terms of finances. But according to a report by Forbes, that’s not the case any longer. According to the cited publication, Fiat Chrysler “has become an unlikely investor favorite, propelled by hopes the premium subsidiaries Maserati and Alfa Romeo might be sold to pay off huge debt.” The main architect behind this development is investment research company Evercore ISI, which recently changed its view on FCA from “negative” to "positive" as an investment opportunity.

FCA further shrugs off negatives with the help of an analyst from Morgan Stanley, who believes that the company is “first and foremost an overlooked sum-of-the-parts story.” Is it me or do finance people don’t actually get how the cookie crumbles in the automotive industry? That's like suggesting a healthy tooth in a mouthful of dentures in dire is a good thing. “FCA’s margins may be surpassing those of Ford by this time next year,” he then added.

It remains to be seen if Fiat Chrysler will part ways with Alfa Romeo and Maserati due to the mounting debt, but the short-term future doesn’t seem too rosy for the company. Sweater-wearing head honcho Sergio Marchionne promised to retire in 2018, leaving FCA as healthy as possible from a financial standpoint, yet that’s no guarantee things will work out by then.
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About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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