JULY 11, 2002

Enlarging Ferrari?

The recent investment made by Mediobanca in Ferrari could change the company in a fundamental way.

THE recent investment made by Mediobanca in Ferrari could change the company in a fundamental way with the bank seeing Fiat Auto, Ferrari's sister company in the Fiat Group, being sold off - but Ferrari taking over Alfa Romeo and becoming a volume car maker. This makes some sense as Alfa Romeo has a much sportier brand than the other Fiat makes and would benefit from the perceived glamour of the Ferrari link. The deal would solve Fiat's debt problems and retain for Italy a national car company.

From a motor racing viewpoint it would be a move full of irony as Ferrari grew out of the Alfa Romeo competition department in the late 1930s and so it would be fair to say that the offspring would be taking over the parent company.

The Italian government does not want Fiat Auto to be sold and is offering subsidies to help the firm survive. At the moment the Agnelli Family, which controls Fiat, says it has no plans to sell but times are hard and the company has been suffering from poor sales and flagging brands.

The plan would have a dramatic effect on Ferrari as the management of what is a very small company would have to handle a much bigger task although chairman Luca di Montezemolo might see this task as a suitable challenge for the years ahead. He has already rebuilt Ferrari and is in the process of doing the same with what is intended to be the bigger Maserati market. To take on Alfa Romeo as well could turn him into the most powerful automobile executive in Italy.