ITALY NEWS

On the road to profit

Fiat and BMW join forces, Harley Davidson buys MV Agusta
(issue no. 84/2008 / July 24, 2008)

Italy's legendary Alfa Romeo running on German engineering. Harley Davidson hogging the European motorcycle market.

 

The likely benefits of strategic alliances partnerships for Italian companies have fuelled two recent mergers.

 

Fiat and BMW recently signed a memorandum of understanding to develop a common platform for future models of the Alfa Romeo MiTo and Mini cars, a move that would allow both carmakers to cut costs. The agreement also provides support for Alfa Romeo to re-enter the North American market. Sources say the Alfa Romeos could be built in BMW's production plant in Southern California.

 

Fiat CEO Sergio Marchionne stated that ‘This is an important step in our strategy of targeted alliances. We are glad to work with such an esteemed and respected partner with a clear goal of boosting the competitiveness of both partners.' Marchionne's strategy of ‘targeted alliances' has helped turn Fiat around from its financial troubles: the Turin-based company now returns a profit and continues to increase its market share.

 

Meanwhile, U.S.-based Harley Davidson recently acquired the financially troubled Northern Italian motorcycle maker MV Agusta for 70 million euro. Primarily intended to expand Harley Davidson's presence in Europe, the acquisition was a win-win deal, thanks to MV Agusta's notable market share. MV Agusta produces high-performance sports bikes under the legendary MV Agusta brand and a line of lightweight motorcycles sold under the Cagiva banner.

 

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