YOU ARE HERE: LAT HomeCollections

Ford Says It May Buy Alfa Romeo : Italian Firm Would Help Bolster Position in Europe

May 22, 1986|JAMES RISEN | Times Staff Writer

DETROIT — Seeking to bolster its position in the fiercely competitive European car market, Ford said Wednesday that it may acquire Alfa Romeo, the money-losing Italian sports car maker.

Ford said it is conducting a two-month study jointly with Alfa Romeo to determine whether to go ahead with plans to buy a majority interest in the auto maker, which is owned by the Italian government.

Ford, which said it has already held "high-level" talks with Alfa Romeo's management, said it would like to merge Alfa's Italian operations into Ford of Europe while still maintaining Alfa's brand name and identity.

The talks come just months after Ford's efforts to merge Ford of Europe with Fiat, the big Italian auto maker, broke down because of a dispute over who would control the new operations.

Ford's interest in buying Alfa Romeo also follows moves by General Motors and Chrysler to link up with other small specialty-car makers in Europe. GM just acquired Lotus of Great Britain, and Chrysler has purchased a small stake in Italy's Maserati.

Earlier this year, GM also sought to buy the Land Rover and Leyland truck units of BL PLC, the British state-owned auto maker, but was eventually rebuffed by government officials opposed to the sale. There have also been unconfirmed reports that GM, Ford and other major auto makers have been seeking to acquire BMW, the West German luxury car company.

Others Interested

"I know that several other companies besides Ford have also been looking at Alfa Romeo," said David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan.

Ford officials refused to say whether they would sell Alfa Romeo sports cars through Ford or Lincoln-Mercury dealerships in the United States if the merger is completed. But an Alfa Romeo spokesman said the Italian company believes that a linkup with Ford would give Alfa access to Ford's distribution system, improving its ability to export cars from Italy. Alfa Romeo's sales are currently concentrated almost entirely in Italy; it sold only 4,502 coupes and roadsters in the United States in 1985, down from a 1978 peak of 6,700. Its two Italian plants produced a total of just 230,000 cars last year, compared to Ford of Europe's 1985 car sales of 1.25 million.

Later this week, Alfa Romeo is expected to report a loss for 1985. It reported a $60-million loss in 1984.

Ford, which held 12.1% of the Continent's car market in 1985, remains profitable in Europe. But, like virtually every major European car maker, it has been searching for a partner to gain a more dominant position in the crowded European market.

While Alfa Romeo is too small to enhance Ford's position throughout the Continent, it could complement the larger auto maker's existing operations; Alfa is strongest in southern Europe, while Ford is concentrated in such northern European countries as West Germany and Britain.

Most importantly, the acquisition could provide Ford with greater access to the Italian home market, where imported cars--even from other parts of Europe--face tough limits.

Los Angeles Times Articles