January 11, 2010 / 4:50 PM / 11 years ago

AUTOSHOW-UPDATE 2-Fiat's Alfa Romeo not up for sale-CEO

* Fiat needs to be ‘realistic’ on Alfa Romeo’s role - CEO

* Marchionne sees Jeep as a way to boost sales in China

* Chrysler to increase headcount as sales recover (Adds employment, U.S. forecast, more quotes, byline)

By Soyoung Kim

DETROIT, Jan 11 (Reuters) - Fiat SpA FIA.MI Chief Executive Sergio Marchionne said on Monday the company’s Alfa Romeo brand is not up for sale and that he understands its shortcomings and is working to determine a strategic direction for the luxury sports car unit.

Fiat, which took a 20 percent stake in Chrysler last year as part of the U.S. automaker’s bankruptcy restructuring, is also close to deciding whether to reintroduce Alfa Romeo vehicles to U.S. consumers, Marchionne said.

“We need to be realistic with what Alfa can and should do,” he told reporters at the North American International Auto Show in Detroit.

“2010 is a make or break it for Alfa ... Alfa plays in a very, very difficult market because strategically it has an ambition to go after higher-end German cars. When you look at execution, it’s been relatively poor,” he said.

Marchionne, who heads both Fiat and Chrysler, forecast Chrysler’s U.S. sales would rebound in 2010, following a 36 percent decline in 2009.

That will allow Chrysler to start hiring engineering and development workers again, he said.

“We’re going to increase headcount. It’s going to be a gradual build and some of that will be done through temporary hires. We do need to reestablish the base of talent,” Marchionne said.

“2009 allowed us to touch the bottom. It’s a question of rebuilding from here.”

Marchionne said China’s auto market has become “real and sizable” and Fiat will take aim at what is now the world’s largest market by leveraging Chrysler’s popular Jeep brand and its existing joint venture partners in China.

China overtook the United States as the world’s largest car market last year and is widely expected to remain in the top spot this year.

“Obviously, the most immediate area of interest for the Chinese market is the Jeep brand, which is the most global,” he said. “That dialogue has started to let us work through the process. (Reporting by Soyoung Kim, editing by Dave Zimmerman and John Wallace)

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