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Like GoPadge said, Alfa is a unit of FIAT. FIAT is the one who has a stake in Chrysler and VW buying Alfa would be a seperate deal and have nothing to do with Chrysler.
VW is on a mission to make themselves the worlds largest auto manufacturer and they are intent on doing it through acquisition versus organic growth. Their idea of using Alfa to replace SEAT is interesting and may work out for them. As much as I like VAG, I wouldn't want to see a brand like Alfa be watered down into a VW clone.
I don't see why they couldn't. Marchionne of FIAT flat out said no, but that has never stopped Ferdinand Piech at VW. I imagine FIAT selling Alfa would be akin to Ford selling Volvo, Jaguar and Rover or GM selling Saab and Hummer. There would be a certain time period wherein the cars would continue to be built in their current form using FIAT technology as they began to make a transition to VW architecture.
The whole thing is really only being considered as SEAT, which is primarily a Spanish brand owned by VW is in the toilet and they are practically giving the cars away. VW is basically contemplating buying Alfa to replace SEAT as they feel Alfa has far better brand equity and they could sell the cars for more.
Make more crappy VW Routan commercials with Brooke Shields in them...if this happened.
How would buying Alfa help them do that? Lets work on either making better jokes (ones that make sense) or keeping things to ourselves (like they tell the special kids at school).
Why? The Volkswagen Group have plenty of better suited engines.
I think German automakers have learned from the Damiler Chrysler merger.
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