Juggling - Italian style

The Financial Times is reporting that Fiat is about to announce a major restructuring of its car brands, following the decision by General Motors to buy its way out of the agreement which would have seen the US giant forced to take on Fiat Auto's debts. The plan, it appears, is for Fiat to buy the Maserati brand from Ferrari (the two companies are both owned by Fiat) but this will give Fiat Auto a better brand and a new distribution network and access to research and development. This would help the company to improve the Alfa Romeo range without having to invest huge sums as money as Alfa could then share some of the Maserati technology and perhaps even production capacity. Ferrari would then have a pile of money to spend on Formula 1 for the years ahead and on the development of new models. In the longer term however Ferrari would be weaker because the whole purpose of building up Maserati was to increase the profits of the Ferrari group in order to raise more money to pay for F1 and make it a more profitable business, which in turn would help Fiat raise more cash by selling shares in the business.

One wonders whether Fiat might also hand over the Lancia brand to Ferrari and embark on a brand rebuilding exercise to help Lancia back to a more competitive position in the market.

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