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Fiat SpA (F) will develop a successor to the iconic Alfa Romeo Duetto Spider with Mazda Motor Corp. (7261) as part of a plan to return the brand to the U.S after almost 20 years, a person familiar with the matter said.
The Italian carmaker will target North America as the main market for a new version of the roadster made famous by Dustin Hoffman’s character in “The Graduate,” said the person, who declined to be identified because the plans aren’t yet public.
The vehicle, based on technology from Mazda’s MX-5, will be sold under both the Alfa Romeo and Mazda brands, the companies said in a statement today. The rear-wheel-drive car will be built at Mazda’s factory in Hiroshima and production for the Italian marque may begin in 2015, according to the statement.
Fiat Chief Executive Officer Sergio Marchionne is overhauling Alfa Romeo with new models including the 4C compact sports car and Giulia sedan. The Giulia will be based on the Dodge Dart platform from Chrysler Group LLC, which Fiat controls, and built in the U.S. Alfa Romeo will return to the U.S. market by the end of next year after being pulled in 1995.
“With the brand image and design from Alfa Romeo, and Mazda’s engine technology, the car may be a hit,” said Satoru Takada, a Tokyo-based analyst at Toward the Infinite World Inc.
Marchionne plans to remake Alfa into a luxury brand to compete with industry leader Bayerische Motoren Werke AG. (BMW) Developing a full range of models for Alfa and boosting sales of the brand outside Europe are crucial to the CEO’s strategy of lifting combined revenue at Turin, Italy-based Fiat and Chrysler to more than 100 billion euros ($126 billion) by 2014.
“This agreement clearly demonstrates our commitment to Alfa Romeo and the determination to grow it into a truly global brand,” Marchionne said today in the statement. “By partnering with Mazda, we will be cooperating with the recognized leader in compact rear-drive vehicle architectures in order to deliver an exciting and stylish roadster in the Alfa Romeo tradition.”
Fiat rose as much as 2 cents, or 0.6 percent, to 3.89 euros and traded 0.3 percent higher as of 3:07 p.m. in Milan. The stock has gained 9 percent this year, valuing the Italian carmaker at 5.36 billion euros.
Marchionne has said the U.S. is a good market to lead Alfa Romeo’s rebirth because the brand’s image isn’t tainted with the legacy of the mediocre models of the past decade. The groundwork has already been laid. Fiat sold 20 percent of the limited-run 8C Competizione, a $240,000 sports car that echoes Alfa’s racing exploits of the 1930s, on the American market in 2009.
Marchionne, who said last year that the 1967 movie “fundamentally changed” his life when he saw “The Graduate” as a “young idiot” shortly after his family relocated to Toronto from the Abruzzo region in central Italy, is counting on Americans having the same nostalgic feelings about the Duetto model and buying its heir.
Fiat targets similar yearly sales in the U.S. for the Alfa model as the MX-5, the person said. U.S. deliveries of the MX-5 Miata, as the model is known in the market, have averaged between 10,000 and 15,000 annually, according to data from Woodcliff Lake, New Jersey-based researcher Autodata Corp.
The Mazda and Alfa Romeo versions of the sports car will be equipped with engines unique to each brand and a final agreement may be signed in the second half of the year, according to today’s statement. The two plan to discuss further cooperation in Europe, they said, without elaborating. Madza and Fiat are not discussing a “capital alliance,” Michiko Terashima, a Mazda spokeswoman said by phone today.
“Fiat needs new models to keep pace with its biggest competitors,” Wolfram Mrowetz, chairman of investment firm Alisei SIM in Milan, said today in a phone interview. “Fiat and Mazda just got engaged. Only the execution of the deal will show if they’ll manage to have a long relationship.”
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