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Can Alfa Romeo Survive? Sergio Marchionne Has A Plan To Save It

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Many car fans love Alfa Romeo, and those on this side of the Atlantic are eager to see the brand's return to the U.S. later this year. But behind the hype and expectation, there are serious questions about Alfa's long-term viability. In light of shrinking sales stats, can it be saved?

According to Auto News, Fiat Chrysler CEO Sergio Marchionne believes it can, and he's crafted a plan to stabilize the brand.

The most important part of that plan, he says, is making Alfa Romeo a standalone company -- one with its own budgets and balance sheets. At the moment, those figures are hidden within Fiat's larger numbers, frustrating analysts, turning off investors, and generally failing to inspire confidence in the brand.

Another key component of Marchionne's plan is the unveiling of six new Alfa models. Those vehicles are expected to be rear-wheel drive, appealing to performance enthusiasts who might otherwise be drawn to Porsches, BMW, and other Euro marques. Like most lineups these days, Alfa Romeo's is likely to include an SUV -- two, in fact.

An analyst cited by Detroit News says that if Marchionne plays his cards correctly, keeping production low and profit margins high, Alfa could sell as many as 250,000 units per year by 2018, with up to 50,000 of those in the U.S. That would represent a substantial growth spurt, considering that last year, Alfa Romeo sold just 74,000 cars worldwide. The reboot is likely to cost around $5.5 billion.

In the long run, Alfa's success depends on several variables, including:

The return of Alfa Romeo to the U.S., via the 4C: If it's as good as it's looked at auto shows, the 4C will turn heads, whether or not it's well-built. (It's a limited edition model, with only about 1,000 slated for U.S. consumers, so reliability will be less of a factor.) If it fails to capture America's attention, though, the comeback will be much, much tougher.

China: Fiat Chrysler is gearing up to launch Jeep production in China, and though competitors like General Motors have gotten a big head start in that country, the Jeep brand could help Fiat Chrysler catch up. If so, Marchionne could leverage that momentum to boost Alfa sales in the world's biggest auto market.

Expect to hear much more about Marchionne's plans for Alfa Romeo next Tuesday, May 6, when the company presents its five-year vision.

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