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FEBRUARY 16, 2005

Fiat buys Maserati

Fiat has stripped Maserati out of the Ferrari group in an effort to spruce up the Alfa Romeo brand, using a little of the reflected glory which Maserati has acquired with its association with Ferrari. It is not clear how much the Fiat Auto company is paying for Maserati but the money will help to boost Ferrari's coffers but will mean that in the longer term the company will not gain the benefit it wanted from the Maserati brand. That process began in 1997 when Ferrari took over the Maserati brand (although it did not own the brand fully until 1999). There followed an injection of capital for a complete revamp of the factory and a new management team and was followed by new cars which used Ferrari technology to begin building brand credibility. Taking Maserati back into Fiat will help the company to transfer technology and image to the downtrodden Alfa Romeo brand.

"This operation is essential for the future development of Alfa Romeo," said Fiat chief executive Sergio Marchionne.

This is all well and good but it leaves open the question of what Fiat will now do with its Lancia brand which has struggled in recent years with fairly uninteresting cars. The thing that is worth noting is that Lancia did once have a great brand, based on competition activities, and rebuilding that would be a useful way for Fiat to turn Lancia around. The recent design studies from Lancia, notably the Fulvia Coupe concept and the Lancia Carcerano Granturismo suggest that the brand might be pitched into the Mercedes-Benz market. The fastest way to achieve this would be for Lancia to put under Ferrari control and be revamped as Maserati has been. Lancia is also has much bigger production than Maserati and so its results might one day help Ferrari to make more money, the company's biggest problem in recent years.

That would help Ferrari pay for its F1 programme.